I would be interested in how you know the prop is "flattening"? Do you mean flexing or bending? I would think it would take a high speed camera to prove that or a good eye watching the prop while someone is holding the plane. What is the weight of the Ultra-light?
The ST 2300 should hover&pull out up to 9.5 lbs I would think. I have a Great Planes U-Can-Do .60 w/Moki 1.35 spinning 17X5 wood Zinger. The plane weighs 8.5 lbs, has awesome vertical and hovers all day(OK, in the hands of a better pilot than me anyway).I did have to put in OS 7D carb to get the Moki just right.