What voltage are you seeing at the battery when the isolator is allowing charge current to reach the battery?
Even with the voltage drop across the diode the voltage should be higher than the resting battery voltage, allowing the battery to be charged. It will just take longer.
I see about 13.5V at the battery when charging off the alternator. When using my AC (shore power or genny) charger, I see just about 14.1V at the battery. It looks like my alternator voltage regulator is set at about 14.2V. (14.2-0.7 diode drop=13.5V ... just like the text book says!)
So ... while I never seem to be able to "top-off" the batteries when charging off the alternator, I think it is only because the SYSTEM only provides a maintenance (or float) level charge voltage ... i.e. very slow (and safe) rate of charge. My typical scenario is - run the house battery down to about 50% after an overnight on the hook. Run around for a few hours before running the house battery down again ... rinse and repeat. If I ran the boat for more than a couple hours, I'd probably see more than 65% charge off the alternator.
After digesting the good advise here and understanding the inherent limitations of the diode isolator - I think every thing is working as designed. Now I understand the quirks. If I was putting in a new SYSTEM, I'd use a more efficient isolator.
Just like my wife ... not perfect and a little quirky, but I think I'll keep her. Too much work and expense to swap them out now.