Hmmm - I may have answered my own question here (or not, only time will tell).
For some reason CCNet does not appear to be using the credential in the config file (don't know why). When it calls SVN it waits for a password to be entered, even if the user cannot see it, and then times out when it doesn't get one.
By accessing SVN from the command line the password prompt is visible and can be entered, moreover the password is cached in %app_data%\Subversion\auth\svn.simple inside an encrypted file for that user. This is why subsequent commands do not prompt for a password and why the console application will run without any problems.
I'm going to configure the CCService now so hopefully this will work as well as the console application does now.
If you have had any similar experiences please let me know. In the meantime I may raise the issue with ThoughtWorks.