Hi Andy,
OSCON = $70 doesn't look right but doesn't really matter. You're correct, 8MHz is as fast as it can go so I'm a bit surprised your getting garbage on the display by running it slower than defined. But, just to make sure, why not change the DEFINE OSC 12 in your code to reflect the correct oscillator frequency? I'd certainly try that but as I said, I would not expect the results you're getting from lowering the oscillator frequency...

/Henrik.