Thanks for the reply Peter.
Since writing the post I coded up option 2 with the caveat that the group must have a particular ID since I do not want this behaviour
for all groups only a particular known instance of a group and I want the pick tool to still be able to pick elements of any class not associated
with this special group.
It seems to work as expected.
I suppose in a sense I was thinking of picking in an "element orientated way" so that members of a group could defer their hits to the owning group by being
marked as such. I suppose I am coming at this at an instance orientated rather than class orientated view point.
Thanks
Jon