I hate to tear other peoples code apart, but I think it's shot.
In one spot you're playing with TMR0...
TMR0 = 7
and then you're messing with TMR1...
T1CON.0 = 1 'TURNS TIMER ON
So which Timer are you using? And then what interrupt time interval are you keeping track of?
Also those Pause commands... what are you going to do when an interrupt occurs in the middle of one? Remember, you don't get an interrupt until the current PICBasic command completes.
As an example (including interrupt usage), have a look at this...
http://www.picbasic.co.uk/forum/showthread.php?t=632
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