Hi,
Two things that springs to mind:
1) You say it's working with DEBUG/DEBUGIN on PortA. I'm just making sure that you're not expecting HSEROUT to work on those same pins.
2) The USART sends and receives the data "true" while the PC (since it's got a level translator/inverter) sends and receives the data inverted. When using the USART you need a MAX232 etc on your board, do you have that?

/Henrik.