I wonder if you wouldn't mind directing me to a source for Palau's nominal per capita GDP in the 1960's-70's as this is the first time I've come across such an interesting claim.

I would say I find the idea pretty odd. From 1947 to 1994 Palau was part of the Trust Territory of the Pacific a territory administered by the United States under the United Nations. The Trust Territory originally comprised four modern nations; Palau, the Marshall Islands, the Federated States of Micronesia, and the Commonwealth of the Northern Marianas. So I am definitely interested if there is a source that is breaking Palau out of that list as the intention of the Trust Territory was that the entirety of the Territory become a single independent nation and it was only during negotiations for independence at the end of the 1970's that the Territory fractured into four parts.

I would say the nation that most closely matches your question, in terms of high GDP to relatively low GDP, is Nauru (which is not terribly distant from Palau in Oceanic terms). Nauru became only the second re-independent nation in Oceania in 1968 and the world's smallest independent republic. Despite its size and the fact that it is a single island and not a larger archipelago, it was one of the richest nations in the world at the time. Its wealth was derived entirely from the massive phosphate reserves found in the center of the island. These reserves had been mined by the Pacific Phosphate Company, until it was effectively nationalized as the British Phosphate Commission, and as part of the independence agreement, Nauru assumed control over company operations on the island and created the Nauru Phosphate Corporation. The company and the Trust created to handle its profits brought a great deal of wealth to the island nation, wealth which was invested in an airline and property around the Pacific. After all, the phosphates were a finite resource and by independence it was clear there was only a few decades of mining left. Ultimately many of the investments made by the Trust failed to turn reliable profits-- economically the 1990s in the Pacific/Pacific Rim were not good and running an airline is always a dicey affair. By the year 2000 the national economy was limping along, phosphates were but a mere trickle, investments had gone sour, and there are no major industries or tourism on the island. Things shifted dramatically in 2001 when Australia made an arrangement with the island government to exile asylum seekers who had been apprehended attempting to make it to Australia by sea. After that point the penitentiary/refugee center became the island's leading economic institution. Most of the island is uninhabitable due to the phosphate mining and there is no practical way to fill in all of the island mass that was mined out during the twentieth century.