Walter,
I'd advocate having two timers in your SOPC Builder system, one for the system clock timer and one timestamp timer.
The reason your design is failing is
#define ALT_TIMESTAMP_CLK none
Unless your SOPC Builder system has two timers, already, you'll have to add another one and re-generate/re-compile. You could also use the "system_timer" timer as your timestamp clock, but then you wouldn't have a system clock timer, and I don't advocate that!
Both the full_featured and standard "examples" have timestamp timers as well as system clock timers. You should change your SOPC Builder design so that it does too.
The key part, that you missed, is that you've got to make sure your System Library properties are properly configured, prior to compiling your application. A quick browse through the Nios II IDE online help yields
Timestamp timer - Associates the timestamp driver to a timer device in the SOPC Builder system. The Timestamp timer and the Periodic system timer cannot specify the same physical device.
Unless you have a gigantic system, adding an additional timer to it shouldn't add more than a few seconds of generation/compilation time.
Best of luck,
- slacker