The configblockflash.c file is for the Crazyflie 1.0, whereas the configblockeprom.c is for the Crazyflie 2. That much I know. I'm sorry but I don't understand the firmware well enough to answer your question about the relationship of the config and the watchdog. One of the devs may be able to address it.
I think the config problem with cfclient and CF1 is an issue though. I cannot configure my CF1 either...
Happy flying!
