OK problem solved.
Instead of using TMS 2-in-1 cable, use SE DCU-60 cable that comes with the phone to flash it, then switch back to TMS 2-in-1 to unlock it.
Use latest TMS version, W700i/W700c unlocking has been improved.
Tricky part is getting the drivers for the DCU-60 cable to load.
> Download drivers from TMS web site and unzip to TMS folder.
> plug cable into USB port (I had TMS running at this point)
> hold down 'C' key on phone and attach cable - DO NOT LET GO OF C KEY
if you do the PC will recognise the phone instead of USB FLASH DEVICE
> When asked for drivers, point it to the TMS folder where the files are that you just downloaded.
> Once the hardware is installed and ready to use, let go of the 'C' key.
The DCU-60 option will only be available in the Flash section of TMS for W700i.
You cannot unlock with DCU-60 cable.
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