Thanks Henrik. I implemented your changes as shown below but this seems to stop the duty cycle at 25% or 256. It then rolls over to 0.

Code:
CCP1CON = %00111100
PR2 = 239
high_duty=(PWM_SIGNAL>>2)        'high 6 bits in CCPR1L
      low_duty=(PWM_SIGNAL<<6)         'low two bits for CCP1CON
      low_duty=(low_duty>>2)           'shift back to CCP1CON<5:4>
      low_duty.4=0                     'PWM configuration bit
      low_duty.5=1                     'PWM configuration bit
CCPR1L=high_duty
CCP1CON = $0C
T2CON = 4