The Gurney Flap should always be mounted on the top side of the wing, but this is not to do with the height of the Gurney Flap, but rather maintaining a laminar flow on the underside of the wing (as this is the side of the wing that you need to avoid boundary layer separation). A gurney flap modifies the flow of air over the wing to maintain boundary layer contact and provide an increase in down force without the trade off of a proportional increase in drag. It's definitely not a case of bigger is better, like the wing itself... in the case of your gurney flap - you'd find that due to the large size of it, it would be creating a vortex at high speeds which is increasing drag to a greater amount than the downforce you are gaining.
The idea of using a gurney flap is definitely the correct one, though if you reduce the size of it, you should have more downforce for less drag, best of both worlds!