Thanks Alexey,
Source images are DNG, the first texture that gets created is perfect. It only seems to happen when I right click and "remove texture" from the model, and then generate it again.
Oddly, the GPU didn't seem to get utilised for the texture building, even though it is a GTX 1060 with driver version 432 (I am now updating it to version 442). I noticed high CPU usage, but no major GPU usage. I'll retry when this driver is updated.