I'VE FOUND THE PROBLEM!!!!! yey!
I've been playing with the command that the init.d script uses to start uwsgi. The script created this command line (That I found using ps):
/usr/bin/uwsgi-python2.6 --master --no-orphans --processes 2 --logdate --chmod-socket=660 --uid www-data --gid www-data --daemonize /var/log/uwsgi/uwsgi-python2.6/baruwa.uwsgi-python2.6.log --pidfile /var/run/uwsgi/uwsgi-python2.6/baruwa/pid --socket /var/run/uwsgi/uwsgi-python2.6/baruwa/socket -- /etc/uwsgi/uwsgi-python2.6/baruwa.ini
After much playing (and alot of faffing with folder creation and permissions!) the blindingly obvious came about, its missing "--INI" before it specifies the baruwa.ini file!!!
So.. my question now is, how do i get it to add it into the command line???
Thanks for all your hard work and if I find the solution before yourself, I'll post it here!