What if you don't use vec_for_screen and vec_to_screen, but simply the camera's position and rotation as reference?
Definately possible, it's what I initially tried before the vec_for_screen, but still had the same problems calculating the entities position relative to the cameras position and angle.
use a second view that is ISOMETRIC to draw your grid without painting a background color using NOSKY. Then just put the view on top (layer > 0) of the camera view and you are done!
Didn't know this was possible, going to try that after Evil's latest post.
Evil, thanks again for this, I was aware the entity would be slightly tilted inwards and it's almost perfect. Only problem with this is mouse_ent doesn't recognise view entities; I've tried resetting UNTOUCHABLE but still unfortunately didn't make any difference.
I'm going to try Superku's solution and hopefully won't have too great an impact on FPS. Thanks again.
Thanks all!