Why
When an entity is merged back into the EntityManager, it will be marked as dirty. This means that when a flush is performed, the entity will be updated in the database. This seems reasonable to me, because when you make an entity managed, you actually want the EntityManager to manage it ;)
In your case you only need the entity for an association with another entity, so you don't really need it to be managed. I therefor suggest a different approach.
Use a reference
So don't merge $contest
back into the EntityManager, but grab a reference to it:
$contest = $cacheDriver->fetch($key);
$contestRef = $em->getReference('Contest', $contest->getId());
$contestRegistry = new ContestRegistry();
$contestRegistry->setContest($contestRef);
$em->persist($contestRegistry);
$em->flush();
That reference will be a Proxy (unless it's already managed), and won't be loaded from the db at all (not even when flushing the EntityManager).
Result Cache
In stead of using you own caching mechanisms, you could use Doctrine's result cache. It caches the query results in order to prevent a trip to the database, but (if I'm not mistaken) still hydrates those results. This prevents a lot of issues that you can get with caching entities themselves.