Yep, that's it. I don't remember the exact numbers off the top of my head but the orbital period for a 100 km Kerbin orbit is something like 30-35 minutes, so by halving a 26 minute burn you'll end up starting on the wrong side of the planet. You need to split your burn into many smaller ones - probably around 3-5 minutes each. The longer they are the more dV you lose to not burning in the right direction at the right time, but on the other hand the longer you take to complete the burn the further off the correct ejection angle you'll be. It's a tradeoff.
I can't see exactly where the relay's connections are going but even before you decouple you're not connecting through it, you're connecting directly to Kerbin even though you only have 4% signal strength. That shouldn't happen - the routing will tend to choose the strongest signal path. Either there's a broken link between the relay and Kerbin or it's not actually acting as a relay for some reason.
edit: a common problem I've seen people run into is putting a weak relay antenna and a strong normal antenna on their interplanetary relays. That will give you a scenario like this one: it looks like the relay has a connection to Kerbin, and it does, and it looks like your ship has a connection to the relay, and it does, but you can't relay signals through it because the relay antenna and the direct antenna do not combine signal strengths with each other for the purposes of actually relaying. The relay antenna(s) on the relay sat need to be able to reach Kerbin on their own for relaying to work.