What is the cause of the distorted movement of my character?

I've been working on making a movement script for a 3D character (in space but only moving along the X/Z plane for now - Left right, forward back etc), the character moves independently of the camera (so the camera stays where it is/whatever position the player put it in, whilst the character rotates). At present, the camera isn't my focus, I currently use a modified version of the 'MouseOrbit' script for that, but will modify further to what I need.

The issue I have, well theres two, is;

Mainly, my character will only rotate 180 degrees. And its only in the negative direction (I have to press 'A', pressing 'D' will do nothing until I have first rotated in the negative X direction). I've not been able to figure out why. The script (below) is placed in the 'Player' prefab with the actual mesh model and camera is within it also (the 'Player' reference/prefab only has the position, character controller and the mentioned script);

The other issue I have is the movement is skewed noticably. When moving with a rotation of 0degrees (IE the direction you face when you spawn in) its fine. However if I rotate 90 degrees to the right, I find myself moving to the left (relatively - IE as if I was reversing at 0 degrees rotation). I had this problem before, and I was unable to fix it.

Below is the script I use for my movement. As movement is meant to be independent of the camera, any references to the camera position/rotation etc do nothing, I just haven't removed them yet.

Any help would be greatly appreciated

 using UnityEngine;
 using System.Collections;

 public class ShipControlScript : MonoBehaviour {

 private Vector3 position;
 private char userInput;
 public Vector3 moveDirection;
 public Vector3 targetDirection;
 public Vector3 newHeading;
 private bool rightClicked = false;
 private CollisionFlags collisionFlags;
 public Vector3 movement;
 public float moveSpeed = 0.0f;
 private float speedSmoothing = 10.0f;
 public float targetSpeed = 0.0f;
 private float impulse1Speed = 1.0f;
 private float impulse2Speed = 2.0f;
 private float impulse3Speed = 4.0f;
 private float impulse4Speed = 8.0f;
 private float rotateZ = 0.0f;
 private float rotateY = 0.0f;

 private string _CharacterState;

 public CharacterController character;
 public float rotateSpeed = 500.0f;

 // Use this for initialization
 void Start () 
 {
     position = character.transform.position;

     moveDirection = transform.TransformDirection (Vector3.forward);
 }
 
 // Update is called once per frame
 void Update () 
 {
     if (Input.GetMouseButtonDown (1))
         rightClicked = true;
     if (Input.GetMouseButtonUp (1))
         rightClicked = false;

     UpdateSmoothedMovementDirection ();

     movement = (moveDirection * moveSpeed);
     movement *= 1;
     //movement *= Time.deltaTime;
     transform.Translate (movement * Time.deltaTime);
     //print (character.transform.position);
     print("" + movement);


     transform.rotation = Quaternion.LookRotation(moveDirection);


 }


 void UpdateSmoothedMovementDirection()
 {
     Transform cameraTransform = Camera.main.transform;
     Vector3 forward = cameraTransform.TransformDirection (Vector3.forward);
     forward.y = 0;
     forward = forward.normalized;

     Vector3 right = cameraTransform.TransformDirection (forward.z, 0.0f, -forward.x);

     float h = Input.GetAxisRaw ("Horizontal");
     float v = Input.GetAxisRaw ("Vertical");

     rotateZ = (v * rotateSpeed * Mathf.Deg2Rad * Time.deltaTime) / 360;
     rotateY = (h * rotateSpeed * Mathf.Deg2Rad * Time.deltaTime) / 360;

     //newHeading.z = rotateZ;
     
     newHeading.x = rotateY;

     if (newHeading.z <= -360)
                     newHeading.z = 0;

     float curSmooth = speedSmoothing * Time.deltaTime;


     if (Input.GetKeyDown (KeyCode.Alpha1) || Input.GetKeyDown (KeyCode.Keypad1)) {

         _CharacterState = "Impulse 1";
         targetSpeed = impulse1Speed;
     } 
     else if (Input.GetKeyDown (KeyCode.Alpha2) || Input.GetKeyDown (KeyCode.Keypad2)) 
     {
         _CharacterState = "Impulse 2";
         targetSpeed = impulse2Speed;
     }
     else if (Input.GetKeyDown (KeyCode.Alpha3) || Input.GetKeyDown (KeyCode.Keypad3)) 
     {
         _CharacterState = "Impulse 3";
         targetSpeed = impulse3Speed;
     }
     else if (Input.GetKeyDown (KeyCode.Alpha4) || Input.GetKeyDown (KeyCode.Keypad4)) 
     {
         _CharacterState = "Impulse 4";
         targetSpeed = impulse4Speed;
     }
     /*
     if(_CharacterState == "Impulse 1")
         targetSpeed = impulse1Speed;
     else if(_CharacterState == "Impulse 2")
         targetSpeed = impulse2Speed;
     else if(_CharacterState == "Impulse 3")
         targetSpeed = impulse3Speed;
     else if(_CharacterState == "Impulse 4")
         targetSpeed = impulse4Speed;
     */
     targetDirection = -newHeading;// + forward;

     if (rightClicked) 
     {

     }
     else
         //targetDirection = moveDirection;
         
     moveSpeed = Mathf.Lerp(moveSpeed, targetSpeed, curSmooth);

     if(newHeading != Vector3.zero)
     {
         moveDirection = Vector3.RotateTowards(moveDirection, targetDirection, rotateSpeed * Mathf.Deg2Rad * Time.deltaTime, 1000);
         
         moveDirection = moveDirection.normalized;
     }

 }

}