In case anyone else gets the same problem - I eventually worked it out. ESXi 4.1 update 3 does not like the latest version of ghettoVCB.sh . I guess that the version of bash in the busybox console is old and doesn't support the syntax of some of the improvements made to the script.
I managed to get an older version of the script from MKSbackup and this works fine.
Can you supply the version of script you are using? I am having the same issues with ESXI 5.0.1. However, the site you mentioned is flagged as a dangerous web-site and I am unable to find and download an older version of GhettoVCB.