Have suffered the same problem. Have tried washing the rope, untwisting etc. The rope looks fine, but when the kite is hoisted, top 1m of spin is twisted. My guess is that core has somehow twisted in side the outer sheath.
I'm going to try a new type of line called paraloc ( http://www.apsltd.com/Tree/d279000/e277617.asp ), where the core is braided with the outer sheath. Hopefully might solve my problems.