variables in debugger watch window not right...?

#define NULL (0)

#define HEAP_SIZE (1000)

static char the_heap[HEAP_SIZE];
static char* ptr_the_heap = the_heap;
static int heap_left = HEAP_SIZE;

int heap_size(void)
  {
    return(heap_left);
  }

void* heap_alloc(int blocksize)
  {
    int remainder;
    int padding;
    void* ptr_block;

    // allocate blocks on 32-bit boundaries
    remainder = blocksize % 4;
    padding = 4 - remainder;
    blocksize += padding;

    if (blocksize <= heap_left)
      {
        ptr_block = (void*)ptr_the_heap; // blocksize changes to 0x3E8 (1000) here
        ptr_the_heap += blocksize; // blocksize changes to 0x200000 here
        heap_left -= blocksize; // blocksize changes to 0x20000C here
        return(ptr_block); // blocksize changes to 0x3E8 here
      }
    else
      {
        return(NULL); // not enough space on the_heap for blocksize
      }

  }

int main(void)
  {
    volatile void *p1;
    volatile void *p2;
    volatile void *p3;
    volatile void *p4;

    p1 = heap_alloc(1);
    p2 = heap_alloc(2);
    p3 = heap_alloc(3);
    p4 = heap_alloc(4);

    while(p1);
    while(p2);
    while(p3);
    while(p4);

    return(0);
  }