This object of the test program below is to toggle a LED at a 5 hz frequency. When the actual 12F1822 test circuit is run, the LED toggles at a 50 hz rate, confirmed by oscilloscope.

What seems to be happening is that the increment-to-count 10 part of the handler is not executing. The toggle frequency is determined only by the pre-scale and post- scale settings. Any ideas?

Code:
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*Program to test timer 2 interrupt                                       
*Target processor is PIC 12f1822                                         
*88 program words, revised 09/26/2011                                    
***************************************
'set 12f1822 configurat1on
#CONFIG
  __config _CONFIG1, _FOSC_INTOSC & _MCLRE_OFF & _CLKOUTEN_OFF
  __config _CONFIG2, _PLLEN_OFF & _LVP_OFF
#ENDCONFIG  

'set registers
   OSCCON = 01101000   '4 mhz osc
   OSCTUNE = 0          'factory calibration
   ANSELA = 0            'all digital 
   OPTION_REG.7 = 0   'global pullups enabled
   WPUA = 000100          'porta pin2 weak pullup enabled
   CM1CON0.7 = 0       'comparator disabled
   TRISA  = 001111       'porta.5 and porta.4 are outputs, all others input

   INTCON = 11000000    'global and peripheral interrupts enabled
   PIE1 = 00000010        'enable tmr2 interrupt
   T2CON = 00011110     'turn on tmr 2 (bit 2),1:16 prescale,1:4 postscale
   PIR1.1 = 0             'clear tmr2 interrupt flag
   PR2 = 156             'preset for 100 hz interrupt

    define INTHAND clock

goto overint

asm
clock
  INCF   _ticks,f        ;ticks=ticks + 1
  MOVF   _ticks,w      ;read ticks into w
  SUBLW  d'10'          ;subtract w from decimal 10
  BTFSS  STATUS,2   ;zero?
  RETFIE                  ;return for next interrupt if not zero
  CLRF   _ticks          ;clear ticks count

  MOVLW  b'00010000   ;load binary literal into w
  XORWF  PORTA,f      ;toggle porta pin4
  BSF   _tenths          ;set tenths-changed flag
  BCF    PIR1,1           ;reset tmr2 interrupt flag
  RETFIE                   ;return to main
endasm

overint:

'declare variables
        ticks    var byte bank0 
        tenths   var bit  bank0 

'initialize register functions
        porta.4  = 1          'initialize led off
        tenths = 0            'clear tenths-changed bit

main:  
  tenths = 0                  'clear tenths-changed bit
  pause 1000                 'wait 1 second
goto main                    'loop back to main