ianw1974 you didn't understand me I think.
Reverting layouts from backend it works fine at my end
1) Default backend layout
2) Default front end layout
3) Home front-end layout
4)
4) Home back end layout
As you can see changes are reflected on the front-end and positions are correctly assigned based on their respective assignment layout.
if i misunderstood your question then please explain in details where the issue is .
Regards
Edited
If a position is not available in the positions list , simply add position name in this file templateDetails.xml as i did for you now
If you look now masthead position is available in the dorp down positions selection list