As default. Kramer said, you need to remove the RelativeSource from your bindings for the SelectedItem and SelectedValue like this (notice that you should add Mode=TwoWay to your binding so that the change in the combobox is reflected in your model).
Thanks for the help all - I finally worked out why I couldn't select the ComboBox items - was due to a mouse preview event handler I had attached to the cell style when I was using a DataGridComboBoxColumn.
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