Aptly named Cannibal Bay, the 12.8km test ate up early leader Derek Ayson's chances when he went off the road in his new Mitsubishi Evo 8, after winning the opening two stages.
Balclutha's Dean Bond passed a stuck Ayson and also 2007 winner Kieran Hall, of Nelson - who holed a radiator when he left the road - and roared on to break the stage record by six seconds.
Bond said seeing his rivals' misfortunes did not slow him down and instead he "pressed on really hard", heading home last year's runner-up, Paul Cross, of Gore, by 1min 48sec.
It has been a roller-coaster couple of years for Bond, who won in 2009 but did not get past the first stage last year when his Mitsubishi Evo 6.5's gearbox gave out. The bitter 2010 result just made Saturday's success taste all the sweeter, he said.
"Especially to win your home event in front of all the people who support us locally," he said.
In taking the victory, Bond and co-driver Ross Moody won the Darryl Robinson Memorial Trophy and the Kerry O'Donohue Memorial Trophy for first South Otago crew home.
"Kerry was a mentor to me during my younger days so it means a lot," Bond said.
The win also clinched him second place in the Mainland Rally Series and puts him in great shape in the Southern Rally Series with a round to go.
Cross, who was driving the same Evo 8 he leased from Cromwell's Paul Beattie last year, was philosophical about playing bridesmaid again.
"The car never missed a beat and we kept it tidy with no spins," he said.
Last year's winner, Andrew Graves (Gore), was third in a Mitsubishi Evo 3, 31sec behind. Rangiora driver John Silcock's fourth place gained him enough points to win the Mainland Rally Series.
Dunedin's Steve Wellington had been fighting for fourth against Silcock going into stage six but, 3km from the end of the stage, lost power and called it a day. Too much damage would have been done to the engine if he had continued, he said.
Credit goes to Gore driver David Kirk, who towed a grateful Ayson back on to the road.
"That's why I go rallying - everyone helps everyone. There is true camaraderie," Ayson said.
The excursion cost him half an hour, dropping him well down the order. However, he charged back to win three more stages, demonstrating the potential of his new car.
Tony McConachy, of Palmerston North, did a fantastic job in his Hayabusa-powered Toyota Starlet to secure fifth overall, the first 2WD car to finish and also taking the Class A honours.
Balclutha's Barry Mills gained his best finish with sixth place overall in his ageing Hillman Avenger. The effort gained him the Class F title.
Rhys Gardner, of Balclutha, also produced his finest Catlins result with seventh place in his Toyota Trueno, winning Class B in the process.
Neville Krammer, of Wallacetown, was eighth and the winner of Class E in his Subaru Legacy. Neville Kidd, of Cromwell, finished ninth and first in Class C in his Ford Escort and Christchurch's Brent Tiney rounded out the top 10 in his Ford Escort, wrapping up Class G.
