Thanks for your replies, I've now got it working without bootloader via direct ISP programming.
I tried varying the -xdelay from -1000 to +1000 ms in 100 ms steps, which didn't help.
Regarding the 10k reset resistor on UART DTR, vs the 1K on the Nano, I took the value from the Mincore Github, which worked fine with the Atmega88PA, and I also tried using a manual reset, no luck, so I don't think this is the issue.
Anyway, if it works with direct ISP programming that's good enough for me.
Thanks again for your help,
Andreas