The original Sonic Dash engine didn't have this problem. I edited the SONIC.anim file to allow for peelout and re-released the engine. Thats when the trouble started occuring.
Try using an older SONIC.anim file.
Check the code for the standing animation. Is there anything in there that tells it not to display the standing animation if, say, the Down arrow is held/the 'crouch' flag/variable is on? If not, add that and see what happens.