MSP430G2152 Watchdog interval timer variation issues (LPM3 with Watchdog as interval timer)

#include <msp430.h> 

//*****************************************************************************
//                            GLOBAL VARIABLES                                *
//*****************************************************************************
#define RED_BIT           BIT7
#define GREEN_BIT         BIT6
#define ENABLE_OUTPUT_BIT BIT0
#define THRESHOLD_0M      6646    // Estimated total counts for a 24 hour period
#define RESET_DURATION    95541   // ~2 sec off time
long    CYC_COUNTER = 0;

//*****************************************************************************
// Set up device for specific clock rate, power configuration, and outputs    *
// before enabling the watchdog timer.                                        *
//*****************************************************************************
int main(void) {
    // Stop the watchdog timer
    WDTCTL = WDTPW | WDTHOLD;
    // Setup the auxiliary clock (ACLK)
    // - DIVA_2 = /4 (~10.9s)
    BCSCTL1 = DIVA_2 | BCSCTL1;
    // Setup the master clock (MCLK):
    // - Run from DCOCLK (SELM_0)
    // - SMCLK from VLOCLK (SELS)
    BCSCTL2 = BCSCTL2 | SELM_0 | SELS;
    // - Set to use 12kHz VLOCLK since XTS = 0 (LFXT1S_2)
    BCSCTL3 = LFXT1S_2;
    // Setup the IO functions for the LED and output enable line
    P2SEL = P2SEL & (~RED_BIT) & (~GREEN_BIT);  // Select IO function for P2.6 and P2.7 (LEDs)
    P1SEL = P1SEL & (~ENABLE_OUTPUT_BIT);       // Select IO function for P1.0 (Power control)
    P2OUT = P2OUT | GREEN_BIT;                  // Pre-configure the output to turn on the GREEN LED
    P2DIR = P2DIR | RED_BIT | GREEN_BIT;	// Set Port 2 direction to output.
    P1OUT = P1OUT | ENABLE_OUTPUT_BIT;          // Turn on output enable
    P1DIR = P1DIR | ENABLE_OUTPUT_BIT;          // Set Port 1 direction to output.
    // Turn on the GREEN LED and turn off the RED LED
    P2OUT = P2OUT & (~RED_BIT) | GREEN_BIT;
    // Configure watchdog/interval timer (WDT):
    // - From ACLK (WDTSSEL)
    // - Interval timer (WDTTMSEL)
    // - ACLK/32768 (WDTIS0 and WDTIS1 UNSET)
    // - Counter cleared (WDTCNTCL)
    WDTCTL = WDTPW + WDTSSEL + WDTTMSEL + WDTCNTCL;
    // Set the interrupt configuration
    // - Enable WDTIFG interrupt for interval timer mode (WDTIE)
    IE1 = IE1 | WDTIE;
    // Configure power mode
    // - LPM3 = CPU, MCLK, SMCLK, DCO are disabled. DC generator disabled. ACLK is active.
    _BIS_SR(LPM3_bits + GIE);           // Original: Enter LPM3 with interrupts
	return 0;
}

//*****************************************************************************
// The watchdog timer controls the counter and the visual display indicating  *
// to the user the amount of time remaining in a power cycle. This routine    *
// is entered based on the WDT interrupt, disabled, the count checked and the *
// indication shown to the user and/or the power cycled, and then the watchdog*
// is re-enabled for another loop. This continues until power is removed. The *
// counter is volatile and resets upon power-up.                              *
//*****************************************************************************
#pragma vector=WDT_VECTOR
__interrupt void WatchdogTimer(void) {
	volatile long i = 0;
	volatile long j = 0;
	volatile int blink = 0;
	CYC_COUNTER++;

	// Reset the watchdog timer
	WDTCTL = WDTHOLD + WDTPW;

	// Enable the LEDs
	P2DIR = P2DIR | GREEN_BIT | RED_BIT;

	if (CYC_COUNTER >= THRESHOLD_0M) {
		// 0M (RESET EVENT)
		P2OUT = P2OUT & (~GREEN_BIT) | RED_BIT ;			// Turn on the RED LED and turn off the GREEN LED
		P1OUT = P1OUT & (~ENABLE_OUTPUT_BIT);				// Turn off the output.
		for (i = RESET_DURATION; i >= 0; i--) {}			           // Delay
		P1OUT = P1OUT | ENABLE_OUTPUT_BIT;				// Turn on the output.
		P2OUT = P2OUT | (~GREEN_BIT) | (~RED_BIT);			// Turn off all LEDs
		CYC_COUNTER = 0;						           // Reset the cycle counter
	}

	// Turn off the LEDs
	P2DIR = P2DIR & (~GREEN_BIT) & (~RED_BIT);

	// Configure WDT to run as interval timer again, restarting the whole process
	WDTCTL = WDTPW + WDTSSEL + WDTCNTCL + WDTTMSEL;
	return;
}