Have found something - any ideas?
I have created 3 mail user accounts, but there are no physical mailboxes created in the MailDir directory in the $HOME/Maildir/ or in /var/mail - but the mail users exist in Virtualmin. That would explain why all of the mail (in and out) is accumulating in the postfix mail queue.
If anyone has some brilliant idea as to what is causing this error - I'd love to hear as I'm in email limbo. Have tried changing MailDir settings, nothing. Could be a permissions problem, but where. This is a fresh install from install.sh.