Multi-thread app design error.

Problem:
I am implementing my design and the implementation is erroring out in
multithread scenario. And, I lack expertise in multith read arena. You
expert opinion is sought.

Scenario:
I have a windows service that is suppose to pick configuration
information from a XML file (NOT app.config).

First time the service is started info config files are read and
classes are instantiated in a child thread using factory pattern and
held in collection. The class has timer (timer config info is
available in info config) for periodical execution. Once the operation
is completed by the object I am using Thread.Sleep with
Timeout.Infinite.

When info config is updated I am using file watcher to reload and
execute the above operation.

Issue:
1. The timer does not fire once the interval has elapsed
2. When info config is updated, I run through the thread collection to
see if object is already available and run it. This errors too.

Do you have a reference/example/guidance on how to implement this?
Specifically, how to hold the object once the operation is completed
and yet use limited if any resources and be able to invoke methods in
the object on demand.

Thanks in advance.