I took a quick look inside the two 3-way switches (one upstairs one
down). Just by looking at the wires I have a feeling the neutral is
from a different circuit (ie upstairs is all old cables, except the
switch has hot/neutral romex coming in).

Is there anything "wrong" with the way the person did this, if its what
you suggsted? Is it against code?

I hear you about the GFCI in the basement being a pain. I'll need to
look into this further tommorow, and decide if its worth the
effort/time to fix - otherwise I'll just put GFCI plugs in the
pertinant areas.

Thanks for your help.