Hi Vepop, thanks for all your help. I tried your suggestion, but unfortunately it didn't work.
I have now found the solution through trial and error. The solution is far more simple and hope this will help someone else like me in the future...

If you want to use a mouth or other facial sprite temporarily without messing up the lipsync, just do the following:
1) Click to select the character and move the play head to where you want to change the mouth sprite
2) Click on the Sprite Editor and select face and then click the mouth to bring up all the mouth sprite options (this will give you more mouth sprites than the Lips editor)
3) Select the mouth sprite you want to use
4) Move the play head to where you want to stop using the new mouth sprite and in the Sprite editor with Face selected make sure the mouth is still selected and click the "Release" button which is below picture of head and to the right (It looks like 2 circular arrows). This will effectively stop the mouth sprite from continuing over the rest of the timeline. 

By doing the above steps, this ensures that lip sync is not lost after you have finished using the mouth sprite you have inserted. 
I'm sure this is fundamental stuff for most users, but for me it was not intuitive and I couldn't specifically find this solution in the user instructions or forums.

I am now a happy bunny until the next time I can't do something!