Keith,
Currently, the stopwatch is used in conjunction with Timesheets which only adds time based on Work Items, not Cases. We do not have the functionality to run stopwatch against cases. You would need to convert an issue to Task to do so. We do have an App in our Marketplace that will provide you the customization to do this...
http://www.clarizen.com/appsmarketplace/item/Create-a-Task-From-an-Issue.html
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