Managed to get it fixed, it was a glitch showing previously blocked contacts.
In the meantime as a workaround you can use the following link
http://www.skype.com/go/getskype-full-last
To get an older build of Skype which does not exibit the above mentioned error.
When running the installer it may mention that you already have a later build of Skype installed. Please ignore this and continue the install.
Your blocked contacts should now be blocked again and not appear in Skype Home Top Contacts.