On my PC - the reconnect account appears to have worked (did not need to try the hardlinks or permissions). There is a big BUT though. The selective sync was set to download copies of one key folder - when the sync completed - every file in dropbox was in "online only" mode. I have needed to select the local file option from the folder itself in order to use any files - another 3-4 hours so far of downloading files to the local dropbox location.
On my laptop, the file update has taken 24 hours to get to 29000 files tosync. I have to restart my laptop every few hours as it just gets stuck at a certain point and then makes not additional progress (as all the files are the same as my PC - I don't think there can be any issues such as corrupt files or long file names as my PC would have been stuck in the same manner). If I try to change the selective sync options to reduce download time (i don't want all of my folders stored locally - that's why I have dropbox) it crashes dropbox and it needs to be restarted. Hardlinks and permissions seems to have no effect. Currently, no files in my local dropbox can be opened .txt files for example just crash notepad.
I am still 30,000 files away from a complete sync - and I get the feeling that the files will be as on my PC and will all be cloud only by the time this process finishes.
I've never had this sort of problem in all the time I have been a user - its very frustrating and disruptive.