Well, it seems that Cathoderay57 has hit the nail on the head.
It seems that the internal resistance of my power supply is too low. If I place a 330R resistor between the PSU and the MiniMod all seems fine and dandy. It has been running now for about 20 minutes drawing a stable current of about 8mA.
No discernable distortion. I have placed a resistor of 120R between Pin1 of the IC and C9, this lowers the gain of the amplifier somewhat which better fits the default volume level of my MP3 player and prevents overmodulation.
So it looks as if I now have 2 Minimods.
Thanks for all your replies.