Why are packages showing as status 'External' in list-packages

Question

I appear to have broken something in my Emacs environment (running on Windows in case it's relevant).

package-list is currently displaying all the packages I've just installed with it as Status 'external' - which as far as I can tell means I can't actually use package.el to manage them anymore. I can't remove them, update them anymore, as trying to mark them with 'd', or 'U' does nothing - no marks appear against the package, and consequently 'x' then says there's nothing to do.

Sample from the list-packages buffer:

  Package            Version       Status    Archive     Description
  magit              20150608.1139 external              control Git from Emacs
  magit-annex        20140629.1457 external              Use git annex within magit

My current .emacs :

    ;; -*- emacs-lisp -*-
(add-to-list 'initial-frame-alist '(fullscreen . maximized))
(add-to-list 'default-frame-alist '(fullscreen . maximized))

(setq url-proxy-services '(("http" .  "127.0.0.1:3128")
                           ("https" . "127.0.0.1:3128")))
(setq make-backup-files nil)
(require 'package)
(setq package-archives '(("melpa" . "http://melpa.org/packages/") ("org" . "http://orgmode.org/elpa/")))
(package-initialize)

(add-to-list 'load-path "~/.emacs.d/lisp")

(require 'powershell-mode)

(custom-set-variables
 ;; custom-set-variables was added by Custom.
 ;; If you edit it by hand, you could mess it up, so be careful.
 ;; Your init file should contain only one such instance.
 ;; If there is more than one, they won't work right.
 '(package-selected-packages
   (quote
    (s afternoon-theme ample-theme ample-zen-theme async badger-theme base16-theme bubbleberry-theme busybee-theme caml circe clues-theme color-theme-sanityinc-solarized csharp-mode csv-nav cyberpunk-theme dakrone-theme darkburn-theme darkmine-theme dash deferred django-mode espresso-theme firebelly-theme flatland-theme gandalf-theme gh google grandshell-theme gruvbox-theme logito magit magit-annex magit-filenotify magit-find-file magit-svn moe-theme molokai-theme monokai-theme mustang-theme naquadah-theme niflheim-theme noctilux-theme nyan-mode obsidian-theme occidental-theme oldlace-theme org-plus-contrib pcache planet-theme powerline professional-theme purple-haze-theme rainbow-delimiters rich-minority rnc-mode seti-theme smart-mode-line smart-mode-line-powerline-theme smart-tabs-mode soft-morning-theme soft-stone-theme spacegray-theme stekene-theme subatomic-theme subatomic256-theme sublime-themes tango-plus-theme tangotango-theme tommyh-theme toxi-theme tracking tronesque-theme twilight-theme ujelly-theme underwater-theme vlf yaml-mode zen-and-art-theme zenburn-theme))))
(custom-set-faces
 ;; custom-set-faces was added by Custom.
 ;; If you edit it by hand, you could mess it up, so be careful.
 ;; Your init file should contain only one such instance.
 ;; If there is more than one, they won't work right.
 )

(cua-mode t)

Anyone got any suggestions? I even nuked my entire .emacs and .emacs.d and started afresh (which is where the snippets above are from). What did I break?

---Edit--- Including package help text for a sample package:

magit is an external package.

     Status: External in ‘~/.emacs.d/elpa/magit-20150608.1139/’ (unsigned).
    Archive: n/a
    Version: 20150608.1139
   Requires: cl-lib-0.5, git-commit-mode-1.0.0, git-rebase-mode-1.0.0
Required by: magit-filenotify-20150125.1456, magit-annex-20140629.1457
    Summary: control Git from Emacs
   Keywords: vc tools 
    Other versions: 20150608.1139 (melpa).

And for sake of completeness, the (default) setting of package-user-dir :

package-user-dir is a variable defined in ‘package.el’.
Its value is "~\\.emacs.d\\elpa"

  This variable may be risky if used as a file-local variable.

Documentation:
Directory containing the user's Emacs Lisp packages.
The directory name should be absolute.
Apart from this directory, Emacs also looks for system-wide
packages in ‘package-directory-list’.

You can customize this variable.

This variable was introduced, or its default value was changed, in
version 24.1 of Emacs.

Answer 1

This is a bit of a sledgehammer approach - but I've fixed this in the short term by commenting out the line :

    ((not (file-in-directory-p dir package-user-dir)) "external")

from the package-desc-status function in package.el

Seems to have done the trick for me.