Thanks to suggestions from Wade and NopHead on the RepRap forum, I found the problem. I feel like an idiot, especially when I am an electronic technician at work and doing pretty well, but completely missed the obvious on my own project.
It was suggested that I didn't wire up two extra lines from the I2C bus to the extruder board, which I did, and it still didn't work. So there I am staring at the firmware, and looking at the picture of the Mendel on the RepRap Wiki, when something clicked, verified something that NopHead mentioned, then looked at the wiring diagram closely.
Its true, i'm an idiot. The I2C isn't implemented at ALL, and the two lines that would actually send pulses from the mother board on what would be I2C to the stepper override pins, crazy huh?
So i'm pleased for a moment that the LEDs are flashing, except one.
I hooked up my DC motor with filter and on the side that had just one LED flashing, the DC motor did nothing, on the other h-bridge on the extruder board, it worked fine.
Another thing was, just in case, I put on a new 644p on the motherboard and removed the Sanguino 1.0 that I had bodged on, and using a specific command for AVRdude, which HAS to be run in the location of the hex file (something that people keep forgetting to mention) I was able to successfully program the bootloader, as was an old old problem where programming the virgin chip directly through Arduuino IDE first would always fail. However using AVRdude to program it the first time, Arduino IDE programs the bootloader just fine thereafter, weird. Another reason I hate Arduino, but not Atmel.
AVRdude come with the latest WinAVR install
The command I used, which I also posted on the wiki is
avrdude -c usbtiny -p m644p -U flash:w:ATmegaBOOT_644P.hex
Run under the directory
Though with AVRdude, you can only use it through the DOS command terminal
There is a program that does it through GUI, I tried it, but it crashed and has not worked since
Even though I can't justify the expense of buying a replacement h-bridge chip for the extruder board, as local supplier Farnell is out of stock and means that i'll have to import it from far away, means that for a ~NZ$7 chip would cost upwards of over NZ$50 in shipping alone, but I still need my RepStrap done ASAP. Fortunately I bought a V1.2 stepper driver, essentially a L27/L298 combo that everyone knows and loves.
The H-Bridge chip is removed and modded the extruder board in a way that I can use the screw terminal to attach Step and Direction to the V1.2, though I have forgotten that I will also need power for it as well, and I have no spare plugs on my power supply, i'll fine some #8 wire somewhere and bodge it.