Based on what you're describing, I would definitely say it is the banner material itself giving you the grief. I can understand the lead edge curling a little, as most rolls of banner material are reverse wound. That's an easy work-around on loading, but you're obviously getting a lot of edge curl, an it's likely due to the heat.
When you purchased from GSG, did they know it was for this specific printer? I'd be returning it and looking at a different product.
Honestly, check with BigFishDM on here and try the banner material he is selling. I am pretty sure he will GUARANTEE his material to run on you L25500. Everything I have purchased from him has run beautifully as promised and I'm thrilled with the results I'm getting. Once I run out of my supply of banner material, he is the first one I'm going to for re-stocking!