Thanks for your detailed reply. I followed all your instructions and this resolved a lot of my issues, however I'm still having a problem when i use some of the themes in a fresh install that removes any nulled scripts see link below.
I've upgraded to 3.5, but when I use the “Fatty RL Vintage out of space” theme it displays the same error.
“Error while parsing PHP: syntax error, unexpected 'version' (T_STRING)”
You can access this using the same username and password as before.