It appears watchdog looks at 127.0.0.1:80 or localhost:80, so I declared a binding for port 80, 127.0.0.1 and watchdog stopped restarting hiawathaproxy.
No more emails.

I think watchdog should look at the servers main IP:80, not 127.0.0.1:80
I appear to have everything running well, some testing then will email to you Mustafa. I had to hardcode my IP's in the custom.defaults.conf.tpl - but you should be able to use a simple for loop and bind them all from KloxoMR IP list.
No wigwam errors, no watchdog problems. Now testing, will report.
