OMH,
I think you are quite correct about turning back below 500' in light aircraft. We used to work on 400' as ok in gliders, but wind strength, direction ect all adds to the equation. Talking gliders .... a "soggy" winch launch is probably one of the most likely ways to get caught out; far more so than a usual cable break. I used to love scratching for lift down at 500' (but only after a suitable landing site was identified) and you soon get used to flying by feel.
The famous "downwind turn" is very real in the circumstances you describe; especially if you are a) Not used to low level flight, and b) unused to flying your aircraft without the fan! ... It is surprising how fast the ground comes up in a poor glider in a turn!
SS