A question about general purpose timers

Hello all,
I am using GPT3 for timing purposes in my RTOS (I am not running it on hardware yet - just in the IDE). I tried to use the example supplied in the "Getting started and creating applications" document (page 163) which is supposed to induce a 1000Hz frequency, but it counts too fast! the following code snippet displays "41" when actually 30 seconds have elapsed. Can it be related to the platform (the fact that I am not running it on the target yet)?

here is the code:
#include <reg167.h>
#include <intrins.h>
#include <stdio.h>

static unsigned long volatile timer_tick = 0UL;
static int sec = 0 ;

static void timer3_irq (void) interrupt T3INT = 35
{
timer_tick++;

if (timer_tick % 1000 == 0)
{
printf("time sec=%d\n", sec) ;
sec++ ;
timer_tick = 0 ;
}
}

void timer3_setup (unsigned int ticks_per_sec)
{
unsigned int reload;
unsigned long frequency = 2500000;
unsigned int prescale;
for (prescale = 0; prescale < 8; prescale++)
{
if ((frequency / ticks_per_sec) <= 65535) break;
frequency /= 2;
}
reload = frequency / ticks_per_sec;
T3CON = 0x0080; /* 2.5MHz, Timer Mode, Count Down */
T3CON |= prescale;
T2CON = 0x0027; /* Setup T2 for reload operation on any T3OTL */
T2 = reload; /* Reload for T3 */
T3 = reload; /* Start T3 with proper reload */
T3IC = 0x0044; /* Timer 3 interrupt enabled, Level 1 */
T3R = 1; /* Start Timer */
IEN = 1; /* Enable Interrupts */
}

void timer3_delay (unsigned long ticks)
{
unsigned long start_tick;
unsigned long timer_tick_copy;
_atomic_ (0); /* start un-interruptable code */
start_tick = timer_tick_copy;
_endatomic_ (); /* end un-interruptable code */
while (1)
{
_atomic_ (0); /* start un-interruptable code */
timer_tick_copy = timer_tick;
_endatomic_ (); /* end un-interruptable code */
if ((timer_tick_copy - start_tick) > ticks) break;
}
}

void main (void)
{
/**** Setup serial port function for Uart usage ****/
P3 |= 0x0400; /* SET PORT 3.10 OUTPUT LATCH (TXD) */
DP3 |= 0x0400; /* SET PORT 3.10 DIRECTION CONTROL (TXD OUTPUT) */
DP3 &= 0xF7FF; /* RESET PORT 3.11 DIRECTION CONTROL (RXD INPUT) */
S0TIC = 0x80; /* SET TRANSMIT INTERRUPT FLAG */
S0RIC = 0x00; /* DELETE RECEIVE INTERRUPT FLAG */
S0BG = 0x20; /* SET BAUDRATE TO 19200 BAUD */
S0CON = 0x8011; /* SET SERIAL MODE */

DP7 = 0x01; /* Setup P7.0 for output */
ODP7 = 0x01; /* Setup P7.0 for open-drain */
timer3_setup (1000); /* Setup timer for 1000Hz operation */
while (1)
{
timer3_delay (100); /* Wait 0.10 seconds */
P7 |= 0x01; /* Turn on P7.0 */
timer3_delay (100); /* Wait 0.10 seconds */

P7 &= ~0x01; /* Turn off P7.0 */
}
}

Thanks in advance,
Tamir Michael