First let me ask if you understand how regen works.
If not, read this following paragraph.....if you do understand....feel free to skip ahead.
Under normal operation with a NON-regen valve.....You have 4 ports. P (pressure) T (tank/return) A (work port) B (work port). For purposes of describing, lets assume A port is going to the BASE end of the cylinder, and the B port is going to the rod end. So under normal operation, if you want to dump the loader (extend the cylinders) A port and P port are connected via the valve and allow pressure to enter P, and Exit A, and fill the based end of the cylinder. This causes it to extend. ANd B port is coupled to T port to allow the fluid exiting the rod end of the cylinder to return back to tank. Curling back is just the opposite.
Now how a regen valve is different is that BOTH A and B ports are connected to P. And NOTHING returns to Tank via T port. So when you dump, All the fluid trying to return to tank out of the rod end of the cylinder, is added back into the base end of the cylinder. Some may question why the cylinder still extends/dumps if you put pressure on both ends. Simple.....different areas of the piston. The force generated extending a cylinder is always more than retract, because you have to deduct the area of the rod. So extend wins out.....and the cylinder extends. And it does so FASTER since you are adding fluid back. But the MAIN reason it is done on loaders is to keep the cylinder FULL of oil when dumping a heavy load, because with a heavy load, gravity may allow the cylinder to extend FASTER than it can be filled with oil. And then you end up with a floppy bucket because the cylinders have air in them.
SO....now that you understand how regen works.....lets relate that to your symptoms.
Regen is for EXTEND (dump) only. You CANNOT retract a cylinder on regen....because applying pressure to BOTH cylinder ports causes it to extend as we already discussed. But when retracting, it operates like a normal valve....only one port open to pressure (B port) and the other port (A-port) is open to tank.
But what happens if you reverse your hoses on the valve. When trying to curl back.....normally you would be pressurizing ONLY the rod side of the cylinder, and the cylinder would retract. But if hoses are backwards.....you are now pressurizing the base end of the cylinder.....and it is causing the bucket to dump.
When trying to push the joystick away to dump position......that is regen....and regen ALWAYS extends the cylinder. So dump AGAIN.
That is why your cylinders are trying to DUMP on BOTH accounts. Now with the grapple.....I presume the grapple lid is already closed (cylinder extended). And just like with your bucket.....where BOTH functions are dumping the bucket......both functions are trying to make the grapple CLOSE....but its already closed so it appears nothing is happening.
Si if you simply swap the hoses going into the diverter (or at your loader valve), everything will work as it should. BUT....the grapple will have VERY WEAK closing force.....since extending a cylinder in regen in much much weaker, but faster (thats the tradeoff).
Regen works well for the dump on the tractor because you simply dont need much force to dump a bucket. But too week for a grapple.
IF I were you....I would forget the curl, and tie the diverter to the lift and lower circuit. IT is what I had to do with my grapple because I have a regen valve also.
Hope that makes things clear for you