When the blades bend back the distance between the tips of the blades gets less. A ring connecting the blade tips prevents this, so the blades don't bend back. The tension along the length of the blades will increase considerably, though.
One can maintain the magnetic circuits like any radial PM design with closed coils. However, a 12 magnet 9 coil design isn't going to really get you anything with a 4 foot diameter rotor, as it still takes 30 degrees of travel to generate one voltage pulse. You would get a lot of time with no voltage output unless you went to very many magnets and coils.
I find it interesting that in about two weeks after posting my latest diary two postings have appeared that touch on it. The diary is here:
http://www.fieldlines.com/story/2007/12/5/16183/1323
Placing a flat ring around the blades forces the average air speed through the rotor to be constant. That would give the maximum power out if we had perfect blades. That is, the pressure gradient through the rotor were also constant.