Hello Pete and welcome. Like others who've replied to your post, I don't look at the new members section on here - sorry to have ignored you till now. I joined the LOC in order to get advice about buying an LS400 and was struck by the friendliness and helpfulness of people on this site, so continue to log in regularly even though I don't have problems with the car (at the moment).
One point that other members haven't raised: the Mk.III is the same length as the Mk.II but has a longer wheelbase, which means more space in the back but a smaller boot (in case that matters to you). Prices seem to have dropped a bit recently, despite some people still asking silly money for their cars (which remain unsold), so I should have thought you'd find a decent Mk.II or III for £1000 - at that price I'd buy on condition (particularly maintenance history) rather than age or model, or even mileage. Mine's 13 years old and has done 141,000, but feels as if you could knock off 10 years and 100,000 miles.
Good luck with your search and let us know how you get on.