Hey Nick,
When about to be nailed by large waves, especially like yesterday, in onshore conditions, is as you are about to go over the falls or cop a lip on the head, take a mental photo of where the kite is and what it is doing before you get rolled, then apply hard left or right to the bar so that the kite loops. This is just a matter of experience as to how long it takes the kite to perform a 360 and be back up to zenith again as often you will be underwater and not watching the kite.
The kite loop will pull you ahead of the wave or at least out the top of the foam and will keep your lines tight as Niall said. In onshore you will always be pushed under your kite and the kite will normally luff or at least slack line, which is bad if you are in really big surf and you get picked up and thrown over the falls

. Had this happen a few times in heavy surf .... scary!

In side shore conditions, keep the kite out towards the ocean whenever you are about to be hit by a wave, if it is really big, ie dble overhead, kiteloop it towards the ocean and it will pull you through the wave itself and out the back side, worry about the board later, you don't really want to be withing cooee of your board in the big sets. Just concentrate on the kite and keep it flying, if you feel even for an instant, the lines go light, KITELOOP!. It is the answer to all your problems in the surf. The lines will sythe through a wave and pull you through green water.

Kiting big surf ie mast high at Margs or Gnaraloo and bigger, it is heaps less gnarly then say windsurfing or surfing because the kite will always pull you out of the sh#t, so long as the lines remain tight. I am more afraid of 6-8 foot on a surfboard than I am of 10+ on a kite.
If for some unthinkable reason you do drop your kite in the surf and it is about to get munched by a wave, throw the bar and activate your safety if it is a reride system. If you do not have a system that loads only one line, throw the lot and swim to shore, provided letting it go will not send it through a herd of swimmers or surfers (bad form).

It will get washed up on the beach and you will be able to retrieve it (providing it is a beachie) For a reef, it depends upon rips, distance to shore, wind direction, available help etc.
If the waves are small, sometimes you can swim at the kite as a small wave hits it (1 foot), and not sustain damage, however I advise throwing the bar if you can, better to be safe than looking for a repair shop.

You picked one of the gnarliest days to try the surf too, the other day, a side shore day or at least side-on will be much easier as there are a bunch of skills you need to develop to handle onshore swell, especially if it is big like some of the sets were on Monday.
Keep it up though, all experience counts.