Believe it or not, I replaced the chip and now the pwm is working. (see attached screenshot of scope trace). Yet, all the other sections were working fine, A/D conversion, LCD display, interrupts and timer.
Name: Screenshot - 04_06_2013 , 10_38_05 AM.jpg Views: 268 Size: 67.2 KB

Now, I will go back and make it not work to see what codes I don't need and/or do need.

I was going to say that I "wasted" a lot of time trying to make the software work, but in a way I didn't waste anything because I was forced to read the data sheet with a little more care, and investigate other programs for solutions.