I reckon this is the issue here....high brightness leds, with a lens that intensifies even the smallest amount of light = looks too 'on' even when almost off!
Yeah, I know led's are current driven devices, but what gives...if the rated forward voltage is say 3.4V, but I run them at 3.1V regulated (because they yield sufficient brightness even at that voltage level)..then PWM principles ought to work fine (in fact, PWM does work just fine without the resistor...I'm running it here now!)....& there's always the internal series resistance of the PIC OP pin (5 ohms? not a lot, but resistance nevertheless)





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