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Hmm, so without the debugger your code does not reset? That is interesting... I'll try different debug levels and also removing the debugger on monday! :)
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Yes, my code runs fine without the debugger. This is a custom board on which I have the Cyclone III FPGA logic being booted from an EPCS16 and the Nios II code booting from external flash memory. I just got the whole thing up and running with the Interniche NicheStack running both telnet and FTP services, both of which are interfaces to an on-board SD Card socket. Quite a chore, I must say...
Good luck with your system on Monday.