Ahoy Andrew,
I had this problem with Goblin, even though the halyard was two part wire-rope to a winch - no watch tackle. My first solution was to put a bale on the upper swivel so it would stay in one place vis-a-vis the stay. That was essential but not a complete solution. Remember, the twist was happening with a wire halyard. I think it comes in part from the luff wire and gets translated into the halyard.
What really helped was to get a good seperation at the mast between the fixed part of the halyard (the part to the watch tackle on your rig) and the hoist that went through a block and down to the winch on the mast.
From your description I cannot tell if on your boat the two parts are opposite each other, port and starboard on the mast. All the way out so that the halyard passes through a non-swiveling block that's essentially athwartships might do it. On Goblin the peak was far enough from the soft eye at the top of the stay that I went for verticle seperation.
That did it.
G'luck
Ian
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