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What had happened is that over the years the threaded rod that holds it all together had slowly screwed its way up through the casting which is fixed to the lathe, leaving very little threaded into the lever underneath. So when I loosened the lever, then swung the toolrest around, the lever dropped off, with the toolrest assembly following suit.
In future I will be checking that threaded rod regularly to make sure it is not projecting out of the top of the casting. With hindsight this is pretty obvious.