Hi,
These questions could be more productively addressed, if you would tell us which processor you are using.
If you don't want the watch dog timer, can you disable it? With PIC's that is easily done.
As for timing processor events, that can be done with the Microchip simulator. I suspect all development packages allow that. You can also do it in your program. I have a utility, PrintRegister. I can effectively start a timer, then stop the program where needed and print the timer's content to an LCD. Obviously , using the development package for your processor is usually easier.
John