Definitely give re-hydrating a go next time. I don't ever bother proofing or making a starter for dry yeast. Just a simple re-hydration.
It should still go down. What temp is it currently on? If its above 18, it should definitely still be fermenting. The yeast has to work a little harder to eat those last few points of sugar so be patient. Remember it won't hurt your beer to leave it a little longer... in fact it will most probably make it better.
What was the kit again? was there a use by on the can/pack of yeast?
How many days was it from the start until the krausen dropped?
Thanks for the advice.
The temp is at a steady 20
The Kit is Morgan's Australian Lager. Can't remember if the yeast had an expiry date, but the can has an expiry of the 15th April 2012
The foam Kraussen dropped very quickly, pretty much not much longer than a day or 2 after it started fermenting. Basically it started fermenting within 12 hours of being put in the fermenter, bubbled and foamed for a day or so then stopped bubbling and the foam subsided.