optimisers are not stupid!

Optimisers are very cunning, and very clever indeed!
And that's the trouble - you also need to be very smart to work out what the optimiser has done, and then still be able to follow your code.

You're always asking for trouble if you use a tool that you don't understand...

So, if you don't need the optimiser, do as Erik says and turn it off;
If, however, you do need the optimiser (for code size and/or speed), then you're going to have to learn how to live with it - and, of course, that gets much harder with the higher levels of optimisation...!

Read this thread, which discusses the trade-offs between optimisation and debugability:
http://www.8052.com/forum/read.phtml?id=140088