NIOS II timer problem

If I were you, I'd write your own Avalon slave with a 32bit up-counter that counts at (say) 1kHz). You can then use simple modulo arithmetic for timeouts (up to 40-something days).

A similar counter, counting at sys_clk can easily be used for performance mearurements.

IIRC the Altera timer is a 16bit slave that requires multiple accesses to read - so can't be used from program code and ISR unless you disable interrupts.

It is also over-complicated for what it is.