Help - nStatus won't release, EP3C5 custom board

You need extra protection against overshoot when using 3.3V I/O on cyclone III, because they don't tolerate more than 4.1V. This is especially true for the JTAG interface as those pins don't have clamping diodes in the FPGA, and the JTAG cable connection is likely to cause an impedance mismatch that will create overshoot.

To avoid problems, Altera recommends to use 2.5V for the JTAG power, or to put extra clamping diodes if you stay on 3.3V (actually they recommend the extra diodes when adding a connector to configure the EPCS chip, but this recommendation can also be used for the JTAG pins).