Second thought: Try bypassing the controller and taking your dump load and connecting to the output of the turbine. Make sure to have an open circuit (as to allow it to come up to speed) and then connect the load. Does the turbine come to a slow crawl? If this is the case, than everything is working normal and you did not match the prop to the alternator (motor in your case) correctly.

When the prop is up to speed, at what RPM do you see cut in (in your case 24v nominal)? A 12v car bulb on a 24v system will not last long as a dump load (it will burn out eventually, leading to free wheel and destruction).

Its a little scary how you have that thing mounted. Just my two cents.

Sounds like the controller might be working properly (you can never tell with those ebay things). It seems like when a load is placed on the motor, it puts the prop in stall.

I dont see how that controller can do that stuff all at once. They are usually only able to be configured for one use at any given time. Maybe you have it set up wrong. If it is set up for a normal diversion load controller, the turbine should be wired directly to the batteries (observe polarity) and will pass through your blocking diode on the positive line.