I have actually read several things that discuss why the use of nonsense words is inappropriate and/or their use to assess phonics knowledge may not garner accurate results. Here are a few:
Goodman, K. (Ed.). (2006). The truth about DIBELS: What it is and what it does. Portsmouth, NH: Heinemann. (section on the NWF assessment specifically)
Cunningham, J. W., Erickson, K. A., Spadorcia, S. A., Koppenhaver, D. A., Cunningham, P. M., Yoder, D. E., & McKenna, M. C. (1999). Assessing decoding from an onset-rime perspective. Journal of Literacy Research, 31(4), 391-414.
Treiman, R., Goswami, U., Bruck, M. (1990). Not all nonwords are alike: Implications for reading development and theory. Memory & Cognition, 18(6), 559-567.