Another thing I was pondering is, shouldn't I be setting bit 0 of the OSCCON register to 1? The datasheet for the 16f887 says this about bit 0:
1 = Internal oscillator is used for system clock
0 = Clock source defined by FOSC<2:0> of the CONFIG1 register.
See post #4
You have the OSC set for internal at the start. In the config settings. You do not need to change the source.