Sorted the headset/stem setup.
1. Penetrating oil and the lower-lock ring hex bolt could be undone, which freed up the threaded upper pre-load ring.
2. Then screwed upper into lower (push rod through tangentially) make the two butt-up together
3. Slackened off 2* stem bolts, pushed stem and two lock-rings down onto head tube, then tightened stem.
4. Unwound, about 5/4 turns, upper ring until play removed.
5. Tightened up lower lock ring hex bolt.
Still have gap between head tube and upper inset bearing race and the lower lock-ring (not quite as bad as above photo). However, zero play now.