ITS NOT using the prescaler those bits need to be 00 ie 1:1
@64mhz with a preload of 25544 you get a tmr1 int every 2.5mS dt's int routine inc's the tips counter till its 4 then inc's the elapsed time clock I count ie once every 10mS

next step after confirming t1con is ok is to toggle a pin in the int routine as per what Sheldon suggested and verify 2.5mS ints are occurring