Reset with ATmega32 (sort of) not working

Latest Arduino IDE with the MCUdude core installed. ATmega32 minimal circuit wired up on the bread board. (Schematic i followed and my fritzing attached). Using a Sparkfun pocket programmer i was able to burn a bootloader to the mc (internal 8mhz clock fuse). I've got a USB serial board which looks to be just like the Adafruit FTDI friend board. Got that wired in (slider switch set to 5V) and was able to upload a blink sketch. No errors or warnings but nothing would happen. Just to check i pulled the vcc/gnd leads from the rail, then plugged them back in and immediately the led began it's blink routine.

Made a sketch mod and uploaded and it took right away. Made another sketch mod and uploaded, nothing. I can do this several times in a row but it'll need a manual reset. "Once" in a while it will take right away, say 10% of the time. I'm assuming the way I've got the reset wired up from the ftdi board is faulty.

The caps are ceramic 0.1mF. 10K pullup on the reset pin.

Any advice much appreciated. Thanks.

Here are pictures:


Are you sure the bootloader is still there? It should 3x blink fast after reset.
You wrote "...and was able to upload a blink sketch". Is it via same way as the bootloader because in that case bootloader was probably removed.

Solved. Just wasn't wiring RESET pin correctly.

Fritzing attached.