The Elecraft Mailing List is great - I had two emails overnight that had the exact
answer to my problem.

Thanks to: Michael - DC0ZO & AL - WA6VNN

Switch off, then press and hold the keys 4,5,6 and switch
on. This will reset your K2 (see Manual page 102)

That resolved my issue. I only had a few minutes before work this morning to test
it... but things are looking good now. I will try to finish the initial alignment
tonight after work.