this should fix the i2c errors
Code:
'****************************************************************
'*  Name    : COMPASS_818.BAS                                      *
'*  Author  : [select VIEW...EDITOR OPTIONS]                    *
'*  Notice  : Copyright (c) 2014 [select VIEW...EDITOR OPTIONS] *
'*          : All Rights Reserved                               *
'*  Date    : 24/08/2014                                        *
'*  Version : 1.0                                               *
'*  Notes   :                                                   *
'*          :                                                   *
'****************************************************************
 
' LCD should be connected as follows:
'       LCD     PIC
'       DB4     PortA.0
'       DB5     PortA.1
'       DB6     PortA.2
'       DB7     PortA.3
'       RS      PortA.4 (add 4.7K (10k)pullup resistor to 5 volts)
'       E       PortB.3
'       RW      Ground
'       Vdd     5 volts
'       Vss     Ground
'       Vo      5K potentiometer (or ground)
'       DB0-3   No connect
 
 
    adcon1 = 7     ' Turns Analogs off
    
    DEFINE OSC 12 'Set oscillator in MHz
    'OSCCON = $70
    DEFINE LCD_EREG PORTB
    DEFINE LCD_EBIT 6
    DEFINE LCD_RSREG PORTB
    DEFINE LCD_RSBIT 7 
' -----[ Pins/Constants/Variables ]-------------------------------------------
SDA            var      portb.1                  'transceives to/from SDA
SCL            var      portb.4                  'sends clock pulses
WRITE_DATA     CON     $3C  'Used to perform a Write operation
READ_DATA      CON     $3D  'Used to perform a Read operation
MODE           CON     $02  'Read/Write Register, Selects the operating mode. Default = Single measurement
                             'Send $3C $02 $00 on power up to change to continuous measurement mode.
X_MSB          CON     $03  'Read Register, Output of X MSB 8-bit value.
X_LSB          CON     $04  'Read Register, Output of X LSB 8-bit value.
Z_MSB          CON     $05  'Read Register, Output of Z MSB 8-bit value.
Z_LSB          CON     $06  'Read Register, Output of Z LSB 8-bit value.
Y_MSB          CON     $07  'Read Register, Output of Y MSB 8-bit value.
Y_LSB          CON     $08  'Read Register, Output of Y LSB 8-bit value.
Cont_Mode      CON     $0
'SCALEFACTOR    CON     4081 'SCALEFACTOR = 65536 * (255/4095) = 4081
'SCALEOFFSET    CON     2048 'The output range of the HMC5883L is -2048 to 2047; therefore to get a 0 (LOWRANGE)to 4095 range
                            'to 4095 (HIGHRANGE) range 2048 must be added to the sensor value.
'ATNFACTOR      CON     127  'the ATN function input range is -127 TO 127. In order to get the positive scaled range of
                            '0 to 255 into the range of -127 to 127, 127 must be subtracted.
'LOWRANGE       CON     0    'see SCALEOFFSET
'HIGHRANGE      CON     4095 'see SCALEOFFSET
X              VAR      byte 'x sensor measured value
Y              VAR      byte 'y sensor measured value
Z              VAR      byte 'z sensor measured value
READX         VAR      WORD 
READY         VAR      WORD
READZ         VAR      WORD
brads          VAR      Word 'angle in brads
degr           VAR      Word 'angle in degrees
azimuth        VAR      Word 'value calculated using X ATN -Y

' -----[ Main Routine ]-------------------------------------------------------
PAUSE 500                                     ' Give sensor needed power up time
  I2CWRITE SDA,SCL,WRITE_DATA,MODE,[Cont_Mode]  ' Send continuous output command
DO
  GOSUB GetRawReading                       ' Get RAW Compass reading
  'RAW X,Y,Z data...
  
        Lcdout $fe, 1 ' Clear LCD screen
        Lcdout "X=",SDEC X  ,"   Y=",SDEC Y 
        Lcdout $fe, $C0, "Z=",SDEC Z
        
        
  'DEBUG HOME, "RAW READX,READY,READZ", CR
  'DEBUG       "X = ",11, SDEC x, CR
  'DEBUG       "Y = ",11, SDEC y, CR
  'DEBUG       "Z = ",11, SDEC z, CR         ' Print angle
  'DEBUG CR
  'Calculate Azimuth
  GOSUB GetAzimuth
  'Calculated Heading in Degrees
  brads = azimuth     'get angle
  degr = brads */ 361 'convert to degrees
  
  'DEBUG CR
  'DEBUG "Heading in NORTH, EAST, SOUTH, and WEST clockwise from NORTH:", CLREOL, CR, CR
  'DEBUG "Degree " ,11, SDEC degr, CR 'display degrees
  GOSUB GetHeading
LOOP

' -----[ Subroutines ]--------------------------------------------------------
GetRawReading:                                 'Compass module subroutine

    PAUSE 400                                  'Wait for new data to become available

    I2CREAD SDA,SCL,READ_DATA, X_MSB,[READX.HIGHBYTE]  'Read the data starting at x_msb 3

    I2CREAD SDA,SCL,READ_DATA ,X_LSB,[READX.lowBYTE]
'Do the same for Z and Y:
    I2CREAD SDA,SCL,READ_DATA, Z_MSB,[READZ.HIGHBYTE]

    I2CREAD SDA,SCL,READ_DATA ,Z_LSB,[READZ.lowBYTE]
 
    I2CREAD SDA,SCL,READ_DATA, Y_MSB,[READY.HIGHBYTE]

    I2CREAD SDA,SCL,READ_DATA ,Y_LSB,[READY.lowBYTE]
RETURN
GetAzimuth:
'The output range of the HMC5883L is -2048 to 2047 and the input range of the ATN function
'is -127 to 127.  I used the method to scale the output to the input discribed in Parallax's Smart
'Sensors Student Guide v1 starting on page 76.
'SCALEFACTOR = 65536 * (255/4095) = 4081
'SCALEOFFSET = 2048
'ATNFACTOR = 127
'LOWRANGE = 0
'HIGRANGE = 4095 (2048 + 2047 = 4095)
    'x = x + SCALEOFFSET
    'x = (x MIN LOWRANGE MAX HIGHRANGE) ** SCALEFACTOR - ATNFACTOR
    'y = y + SCALEOFFSET
    'y = (y MIN LOWRANGE MAX HIGHRANGE) ** SCALEFACTOR - ATNFACTOR
    
x = readx >>4  
Y = readY >>4
'Z = readZ >>4
  'DEBUG       "SCALED X,Y", CR
  'DEBUG       "X = ",11, SDEC x, CR
  'DEBUG       "Y = ",11, SDEC y, CR
    azimuth = x ATN -y
    

  'DEBUG "Azimuth ",11, SDEC azimuth, CR ' display scaled azimuth
  'DEBUG "COS Azimuth ",11, SDEC COS azimuth, CR ' display scaled cos azimuth
RETURN
GetHeading:
'Gives a heading in North, South, East and West.
    IF degr = 90 THEN
        'DEBUG "NORTH"
        'DEBUG CLREOL
    ENDIF

    IF degr = 0 THEN
         'DEBUG "EAST"
         'DEBUG CLREOL
    ENDIF

    IF degr = 270 THEN
         'DEBUG "SOUTH"
         'DEBUG CLREOL
    ENDIF

    IF degr = 180 THEN
         'DEBUG "WEST"
         'DEBUG CLREOL
    ENDIF
RETURN