As predicted by many on the forums, Garmin have replaced my faulty chest strap without any fuss whatsoever, which is great service from them. However, it does point to this being a known issue that they are aware of.
A further update on my experience of the polar strap that I am currently using is that this is a very comfortable strap (more so than the Garmin) and so far there appear to have been no issues or problems with it from an accuracy point of view. The only real difference is that you need to dampen the contact points before wearing.
Hope this provides some useful information if you are starting to see spikes or irregular readings with your Garmin.