If the prop shaft alternator/ Vetus drive is increasing speed with revs then the issue is clearly after that. I have no experience of the mechanics of the C Drive, but I understand it is heftily engineered.
l presume you have the original prop and my first guess would back up your idea that maybe the shaft key has failed so most of the idling grip is being produced by the propellor nut, but the extra torque is providing slippage.
have you tried very gradually increasing speed forward to see if very gradual torque allows the nut to hold the friction. If you get some increase in speed then it would seem to be the prop slipping.