I would guess that there is a problem in your build options, or perhaps the new PBP plugin hasn't registered correctly. The executed command line should not have a "-z" in it, and MPLAB should not be trying to load a COD file. PBP 2.60 should allow you to use MPLAB 8.33.
Go to the Build Options for the project's program file and make sure it looks like the attached screenshot. If it doesn't show the same options (the plugin is old), go to Start > All Programs > PICBASIC PRO Compiler and click on "Install MPLAB Plugin". On Windows Vista and Windows 7 systems, you may need to right-click and select "Run As Administrator". Report any errors that you receive. Restart MPLAB afterwards.
As Melanie mentioned, there is a length limit when passing filenames to MPASMWIN, but it is the total number of characters in the path and filename that is the problem. I believe the limit is 63 characters. In your case, the subject of this limit is the string "D:\My Documents\PicBasicTrials\Blink\Blink_16F690\BLINK_ 16f690.ASM". I'm not sure why you don't receive an error before assembly, but this could be because of the build options setting that is suppressing the MPASMWIN progress bar (-oq). In any case, you might move your project folder closer to the root of the drive - "D:\PBPTrials\Blink_16F690\"
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