As you change course, you must comply with rule 16:
"When a right-of-way boat changes course, she shall give the other boat room to keep clear."
The definition of "Room."
"The space a boat needs in the existing conditions, including space to comply with her obligations under the rules of Part 2 and rule 31, while manoeuvring promptly in a seamanlike way."

"existing conditions" is defined somewhat in case 134:
"A boat’s proper course at any moment depends on the existing conditions. Some of those conditions are the wind strength and direction, the pattern of gusts and lulls in the wind, the waves, the current, and the physical characteristics of the boat’s hull and equipment, including the sails she is using."

Though it may seem as though this puts some limit on L to accommodate W's more limited ability to come up, the rest of the case actually favors you. In this case, a boat rounding a windward mark notices the boat in front of her is having troubles with her spinnaker set. The trailing boat elects to delay setting hers, gets an overlap to leeward from clear astern. She than sails higher (proper course for her current sails). Windward protested Leeward saying that her proper course should have set her spinnaker and sail lower to the next mark. The appeals committee decided that there was no rule that said leeward had to set her spinnaker and therefore could sail the proper course for the sails she had at the time.

So, my conclusion is that you might have to luff slower to give W a bit more room, but can come up and the windward boat has to respond. You do not need to give her room to take her sails down. If she cannot get clear, she breaks rule 11. 

The following four Cases and Appeals define what is not appropriate.
 
WS Case 72 – Discussion of the word ‘flag’. (rule 60.2(a)(1))

RYA Case 2001/13 – A glove cannot be a protest flag. When the display of a protest flag is required but not complied with, a protestee’s objection at the start of a hearing to the validity of the protest is to be upheld even if the protestee must have been well aware of the intention to protest. (rule 60.2(a)(1))

US Appeal 66 – A 2-inch by 8-inch protest flag on a 40-foot boat is not of sufficient size or of suitable proportions to be “conspicuously displayed.” (rule 60.2(a)(1))

Sail Canada Appeal 63 – For boats greater in length than 6 metres, a protest flag must be perceived to be a flag. The flag must be displayed at the first reasonable opportunity. For a fully-crewed boat, compelling evidence would be required to justify display within minutes, rather than seconds of an incident. Failure to meet these requirements will render a protest invalid. (rule 60.2(a)(1))

 Time to re-read RRS 11 and the definition of keep clear, plus RRS 14.

Go for it.

KC(a) - not met.
+
KC(b) - met/not determined?
=Did not keep clear.
R14 - insufficient distance was the cause.

Notes:
1. Some people wrongly believe that if KC(b) is met it's enough to say W kept clear. However KC(a) must also be met. The two are connected with 'and'.  KC(a) always applies, overlapped or not.  KC(b) only applies when overlapped.  My issue is not with KC(b). It's immaterial if KC(a) is not met.

I'm saying that KC(a) was not met.

2. Dropping the sheet is never a problem if the distance is sufficient between the boats. Insufficient distance caused 'dropping the sheet' to be problematic. Insufficient distance caused the contact. Not dropping the sheet.

3. KC(a) - Think of 'need to take avoiding action' as the trigger here. (See above.)

(W failed to keep clear of L, as L was able to sail her course but had need to take avoiding action while doing so. 

In fact, to resolve that need to take avoiding action, L would have had to bear away to increse the distance between the boats.  So effectively, she could not 'sail her course without a continuous need to take avoiding action'.)

Thanks so much, Mark. It's good to have these when racing outside the US, in order to have more credibility. 

Thank you Paul for the change. And thank you all for the helpful suggestions.