Hi Chris,
I've never had this behaviour on my machine where the exe also resides on the same logical drive. I would bet that your exe isn't using the debug.txt in your project (development) directory, since there's no path set to that directory in MM. There must be a debug.txt somewhere in the common directories or in a directory you specified an absolute path or a path beginning with "\" for in the DEVMODE constant or on your own anywhere else.
Now I have no more ideas :) Let us know what was wrong when you've found it!
Regards,
Armin