Hi Maddy,
Yeah usually Worklfows and versionnable items don't go along very well. But here's what you can try. Instead of setting the workflow as default in the itemtype definition, uncheck it (keep it just attached) and call the workflow from the preliminary state in the lifecycle definition. I think it should work better. If it doesn't I know we have make it work in the past so I would then look for another solution.
But once again, workflow on a part is usually not recommended. If the aim is to drive the lifecycle state, usually it goes through an ECN, which has its own lifecycle, its own workflow and is not versionnable.