I did not touch the watchdog, and i leave the SFR for the watchdog as default reset setting. The reset circuit is using the application note or datasheet's suggestion.
You would be MUCH better off with a supervisor chip, The errata states that with RC reset you may lose the boot vector.
one interesting thing I found: if i reduce the among of push or pop of Acc, it would become stabler?!
qualified guess: stack overflow

Erik