I called into the police station again this morning.
They told me there was a error in the expiry date which was shown on my wife's Residencia when she renewed it in 2007, They put expiry as 2012 when it should have been 2017. She can now get the card re-issued, by producing a few photocopies copies, very straightforward (it would appear! )
We will not be doing anything until April as we a will be on a trip from January until then and of course a new card could not be issued before we leave. That could make returning a bit of a problem.
I read somewhere that the European Court had instructed Spain (and I guess others) to issue the Permanent Residencia Card for 10 years not five as they had been doing.
I suspect there was no 'error' in the date but that maybe they have decided to comply with the E U Court ruling.
May I suggest that anyone who has a card which was issued in 2007, or after, to call in at the Documentation Section of the National Police and see of they too have an 'error' in the date.