The problem you're having with the NFS is that the IP address of the board is changing from when you initially connect to the NFS server and after the board runs its init scripts.
As you can see from this bit you've mounted NFS and are running scripts -- the final action being starting up udhcp. After that I bet if you sniff the wire you'll see your IP address has changed. Most NFS servers have heartburn over that.
VFS: Mounted root (nfs filesystem).
Setting the hostname to freescale
Mounting /proc and /sys
Mounting filesystems
mount: Mounting on swap swap defaults 0 0 failed: No such file or directory
Starting syslogd and klogd
Setting up networking on loopback device:
Setting up networking on eth0:
udhcpc (v0.9.9-pre) started
nfs: server 10.5.3.71 not responding, still trying
nfs: server 10.5.3.71 not responding, still trying
As for resetting back to flash -- the users guide covers this.
--Kurt