Is this to be expected?
yes , any software timed process can be adversely affected by the huge overhead imposed by a dt int style pbp interrupt.
there are many solutions :-
in no particular order
1. lower the baud rate till errors minimised
2. disable interrupt during transmission
3. run chip at 64mhz to minimise isr latency
4. use the eusart
5. send 1 chr at a time with isr disabled to minimise "lost" interrupts