1. What voltages did you apply to the anodes of the diodes and what voltages were required to engage all 16 blocks of the display in your simulation?
2. What type of diodes did you use?
Is it possible that Proteus introduces some parameters that I cannot obtain on my protoboard and which make all the difference?
1. As I said, 2volts on the first run and 1.5 on the second. 2 and 4 Hz for both.
2. No components were changed.
It's a sim so all things are possible. BUT these are very common devices and Proteus will report wrongly configured i/o. eg. using ADC module with i/o set for digital. I agree that the prog gets no style points and relies upon defaults but it does seem to work. Sims tend to fall down with arcane timing issues (race conditions, read modify write etc.)

With all due deference to the other more PBP savy posters on this thread your problem is most likely physical. Check that you have flashed what you think you have flashed, use the pre-compiled HEX. Check component values and the circuit. Make sure your input is what you think it is.

For example, does your programmer pick up the config fuses from the HEX file? According to my trusty PicKit2 it should be 2F4D.

Good luck, George