I've been going around and around about this problem in the Kinetis MCUs forum for weeks without resolution and was referred here.
In KDS 3.2 (and KDS 3.0 before that), when the target executes a WFI instruction the debugger stops with the PC and all registers reading 0. It's still connected and apparently able to read memory, but it can't resume. If I step into the WFI instruction it steps past it fine, but in normal run mode it stops every time. The target keeps running normally.
This happens with a P&E Cyclone, P&E Multilink Universal, and with the FRDM-K22F's built-in OpenSDA debug adapter. I've tested it on the FRDM-K22F and my own MK02FN64 boards. This problem does not happen in CodeWarrior 10.6 on the same system with the same drivers and debug interfaces, so it's definitely not a hardware problem. Unfortunately NXP has abandoned CodeWarrior for Kinetis so I don't have the option of using my preferred IDE with the K02 parts.