flash stopped working

And using <%= debug(flash) %> display an empty hash.

This just seems too simple to not work, and it worked just fine with
Rail 1.2.

Has something changed? Somethig that didn't interfere and reset the
flash in 1.2 that now does?

Session handling has changed (several times) between 1.2 and 2.3. I
think the key thing here is likely to be the fact that you're calling
reset session and that the flash is stored in the session. I'd check
the cookies going back and forth between the browser and your app to
see exactly what is going on right now (maybe something odd like the
flash object still being in the session object that is being dumped
rather than the new one or something like that