Updating you software is a good thing. What is your current Ae version? Sounds like a performance issue. I would try to clear all cache (edit->purge>all). see if this issue petsists. Try to isolate this problem: one layer, with or without E3D. if this still happens try resetting your Ae preferences.
Thanks for the response.
My current AE version is 126.96.36.199
Cleared the cache which did not help.
The effect does work on other layers but just not on E3D layers.
Not sure how to reset my AE preferences but I don't even think I've altered them from the default settings anyway.
Still stumped. I noticed that the 'Adobe Creative Cloud' folder under C:\Program Files (x86)\Adobe\ was last modified on the date this all seemed to change (23rd Oct) indicating some sort of possible update yet the AfterFX.exe file was not modified on that date.
To reset your preferences on Windows:
1. Press Ctrl+Alt+Shift while the application is starting.
2. A dialog box launches asking you if you want to delete your preferences file.
3. To also restore default keyboard shortcuts, Alt-click the OK button.