Thanks, Barry. If you read what I originally posted you will see that you can set OSCCON to any postscaler value and the behaviour does not change.
And yes, I read the documentation - I know how it is supposed to work.

The actual code is not going to help this time, but sure:

OSCCON = $11110011
DEFINE OSC 8
CLEAR
ADCON1 = 0
Startup:
TRISA = 0
PORTA.1 = 1
pause 10
PORTA.1 = 0
pause 10
goto startup
end

The LED on PORTA.1 is blinking just slightly faster than once per second, when it should be so fast you don't even see it blinking.

So to repeat the original question: Is there something in the config registers or somewhere else I'm missing that overrides the values in OSCCON?