I cant see anything wrong with this code as such, so I think it is just an
"un-expected" collision causing this problem.

As a test, try using all these flags, and it should move fine.
If this is the case, try them one at a time till you find the one that makes the problem go away.
Then you'll know what type of object is causing the problem, and that should point you the the problem object.
Then you just have to decide what to do about it...
IGNORE_WORLD | IGNORE_MAPS | IGNORE_MODELS | IGNORE_SPRITES | IGNORE_CONTENT | IGNORE_PASSABLE