I was able to answer my own question. Space Station Oblivion.
Not long after this post a digg article got front paged - A history of first person shooters
http://gnomeslair.blogspot.com/2006/12/his...-pictorial.html
Lo and behold, there's the game I was looking for - for quite some time too...
http://en.wikipedia.org/wiki/Driller_%28game%29
funny how these things work. I spend years wondering about that game, asking friends and anyone who was pc gaming in that period and then I find this forum then the next day someone posts it on digg.