No, something's not right.

I've used PBP with 16F876 extensively, which is the smaller I/O brother of the 877 without problem. I've maxed out the RAM and the Program Codespace and know PBP works to the limit of the PIC with versions 2.44, 2.45 and 2.46.

Now if you are embedding Assembler which is going to Bank Switch or do anything other than rudimentary functions or access Registers that PBP isn't, then you must save the current environment on entry and restore it on exit. Otherwise you will not leave the PIC in the state PBP expects it to be.

What version of PBP are you using?