--offset parameter to cyelftool.exe -B will shift up the bootloadable code in flash and create .cyacd. This would be causing memory overflow in your application. You can observe it in .cyacd generated by both commands.
Hmm interesting, that does sound like the opposite of what I want. Do you know if there is any way to remove this flag from the build process. Looking through the Bootloadable and bootloader components isn't yielding me much.