I think the AC charges the battery so it would require a battery in order work.

Your problem sounds memory related to me, but without the spare RAM to check it I can't tell you how to verify this.

Have been searching the boards here for an answer and might have left out a bit of important info.

The problem started when I left the machine for a few days in standby mode (lid closed) with the AC cord unplugged. So I suspect that I drained the battery down fully. When I came back from holiday, computer problem kicked in.

That said, have now purchased a new power supply and still not working with or without battery in. Does a laptop need a battery to function even with an AC plugged in?

I saw a resolution to very similar problem when searching out my overheating issue. They had the same situation where a laptop battery went low while on standby, and then wouldn't work. The solution was to disconnect the CMOS battery with regular battery and AC disconnected. Leave CMOS disconnected for 10 minutes and plug it back in. This reset the BIOS and things worked fine again. The CMOS is usually a round button type battery with a little cable or just in a clip. If with cable, likely a colored plastic cover is over it (yellow or blue?). They are usually under the keyboard which pops up with little tabs at the front - watch out for the delicate keyboard ribbon cable! I hope this may help in your case too. Best of luck.