I've heard something similar Phil, so I'll have a guess.
If your scope has FL 1000mm and you place in a 2X barlow then your FL becomes 2000mm (see above
) If however you place it after the diagnal then you have to add the extral length of the diagnal, lets say 100mm (not actual measurement) then your initial focal length becomes 1100mm and your barlowed length becomes 2200mm. I know this doesn't even come close to the 2X a 3.5X . Don't know if this the complete story or even completely accurate, but it make sense to me. I'm sure someone else here is more an optical genius than me and will give a better explaination.