I had a bit of an issue getting things going as I've never played with the fuses before. Maybe this can save someone else some time. If I'm doing something silly here please correct me.
[DISCLAIMER] this worked for me. Use at own risk[DISCLAIMER]
Executed these commands from the subfolder \hardware\tools\avr\bin of my local arduino IDE.
Connected the board ICSP using an USBASP with the latest firmware. Change the "-c usbasp" part if you connect using something else.
avrdude -C ../etc/avrdude.conf -c usbasp -B5 -p ATmega328P -U flash:w:..\..\..\arduino\avr\bootloaders\atmega\atmega328_1a.hex
avrdude -C ../etc/avrdude.conf -c usbasp -B5 -p ATmega328P -U lfuse:w:0x62:m -U hfuse:w:0xDE:m -U efuse:w:0x07:m -U lock:w:0x2F:m
I think the B5 was crucial as it slows things down a bit. The bootloader (atmega328_1a.hex) is the one mentioned in the first post. I also added the part in the boards.txt of the arduino IDE.
Now I can connect the board to the FTDI and upload and run sketches without issues.
On to the next step