If so, why was his invention forgotten?
There seems to be a good bit written about Blasco de Garay, but in Spanish, and that's not one of my languages. However, I think I can answer your basic steamboat question. In 1825 the director of the Simancas Archive , Tomás González Hernández, wrote a letter to historian Martín Fernández de Navarrete saying he had discovered papers that described the floating test of a large ship built by de Garay with moving wheels and a large container of boiling water [ una gran caldera de agua hirviendo y en una ruedas de movimiento complicadas ]. There would have been temptation to leap to the conclusion that it was a steamboat: in 1825, the steamboat would be a very exciting new technology. González Hernández leapt. The problem is that no plans or documents have actually ever been found that support this notion. Precisely as to why Hernández wrote the letter (whether he actually saw some documents that then vanished, or just invented the whole story) seems to remain something of a mystery. More crucially, there are lots of existing documents describing de Garay's experiments with human-powered paddlewheels , which he thought should be much better than oars at powering a galley. Steam propulsion is mentioned nowhere in these documents ( though there's a possibility there were cauldrons of boiling water for defensive reasons). So, while de Garay was a very ingenious man, he apparently did not build a steamboat.
Spratt, H. Philip (1955) The Prenatal History of the Steamboat . Transactions of the Newcomen Society.30:1, 13-23