Well, I don't think it's QUITE what you're looking for but if you have the "padhook" option turned on you can reset the console back to the system menu by pressing R + Z + Start (you can also power it down with R + Z + B + d-pad down). However, no, the reset button itself to go back to the start of the same game doesn't work very well if at all. (MAYBE for some select games ... but mostly just a series of different errors depending on which game you're using)
since you said you're willing to use a disk format, you could always replace DM(L) with a DVD-R cMIOS which WILL work with the reset button. (You can get one from ModMii. IIRC there are 3 versions it makes available and they're near the middle of the right side on the cIOS download page.)