I finally found the answer, in case anyone else has this problem below is the solution:

Flash 8 only carries instance names until the movie playhead encounters the next keyframe. On the next keyframe, it is not possible to re-use an instance name, I guess this is a limitation of Flash8. The workaround is to create a separate layer, place any objects you wish to carry on this layer, and do not add keyframes to the layer. Not a pretty workaround but better than recoding instance names for every keyframe on the content layer.