Hi SCOTT,
Actually, KSD3.0 and KDS3.2 are all working ok on my side after enter the wait power mode, I even try the project which I give you on some colleagues's computer, and I didn't reproduce your problem on our side with the same board(FRDMK22), the same project(K02FN64VLF10.rar), the same debuggers(cyclone, multilink, even JLINK). But you said if you use the codewarrior, it works ok, and just the KDS have problem.
Because I just the kinetis engineer, I think this problem you need to create a KDS error post on the KDS community, the KDS expert will help you to check it from the KDS software point, whether it is relative to some PC configurations.
Today, I already see your post on the KDS area.
Debugger resets on WFI instruction
Please also add the error information to that post: no source avaiable of 0X4d8, the picture which you give me.
I will also follow your KDS post, if any help need about the kinetis, I will help you.
Best Regards,
Jingjing