@Flep... I've got it:
http://www.php.net/ChangeLog-4.php
"Disabled CURLOPT_FOLLOWLOCATION in curl when open_basedir or safe_mode are enabled." as of PHP 4.4.4/5.1.5."
You're on a shared host aren't you? And either safe_mode is on or open_basedir is enabled.
There is a hack around it:
http://php.net/manual/ro/function.curl-setopt.php#71313
But it's beyond the scope of what I've done to be able to include this (I don't suffer the problem so cannot reproduce it to test any fixes).
If you're comfortable hacking and do figure the solution out using that as a starting point then if you let me know what you've done I'll update the hack to take it into account.