I got my answers from digging a little on Neo Geo.com. The 161 cart reset does not function when a memory card is in use. You can disable the memory card on the Omega, but it requires opening it up and messing with jumpers and what not.
The region issue could be the memory card as well, it was recommended that you try reformatting it, or it could be the battery.
Since this is a heavily modified CMVS, I hope to hell the battery was replaced during the build. I'm going to try reformatting; if that doesn't work, I'm going to leave the console on for several hours to ensure the battery is charged. If that doesn't work, I guess I'll pop it open to see how the battery looks.