I think yes, the timer should be honoured, though that does mean it is not the same as a flush followed by reset. That means that it is really a Clear rather than a Reset. Intuitively I think that is what a user would expect.
For item 2, I don't like the -ve flush suggestion. It is too difficult to understand.
For simplicity the 'send last message' suggestion appeals, but on the other hand a max queue depth may be useful for users who want to queue messages, but want a safety net to prevent the queue growing too large in unusual or fault conditions.
