...The only effective change is that version 2 blocks will be rejected once 95% blocks are on version 4. Blocks are on version 3, so this code is not effective yet.
The next release will increase the block version to 4.
Then how is it that the log reflects:
26 of last 100 blocks above version 3

There are people incorrectly mining with other software/pools that sets version bits. These are detected as > 3 blocks.
If you mine with the wallet it will only generate version 3 blocks.
My windows 64bit wallet isn't used for mining, only payouts from pools. I'll try the 32bit version, see if it's any different.
Edit: The windows zip files are missing the daemon & cli - are there any available?
Edit2: Same issue with 32bit version. I'm struggling here - I have 20+ other wallets on this system that work fine......