I've never used this loader, but I did take a quick peek at the source files.

Try this;
Code:
    DEFINE OSC 20          
    DEFINE RESET_ORG 0x800  
    
    INCLUDE "DT_INTS-18.bas"        ' Base Interrupt System
    INCLUDE "ReEnterPBP-18.bas"     ' Include if using PBP interrupts                                           

    LED1   VAR  PORTB.0
    
'   Hardware configuration
    '   ====================== 
    ADCON1  =   %00001111       ' All Digital Inputs                         


ASM
INT_LIST  macro    ; IntSource,        Label,  Type, ResetFlag?
        INT_Handler   TMR1_INT,  _ToggleLED1,   PBP,  yes
    endm
    INT_CREATE               ; Creates the interrupt processor
ENDASM    


T1CON = $31                ; Prescaler = 8, TMR1ON
@ INT_ENABLE  TMR1_INT     ; enable Timer 1 interrupts

Main:
    Pause 10  
GOTO Main

'---[TMR1 - interrupt handler]--------------------------------------------------
ToggleLED1:
     TOGGLE LED1
@ INT_RETURN
Remove power. Place a jumper from PORTE.0 to ground. Power up & load the above after compiling it.

After programming it with the loader, power down. Move the jumper on PORTE.0 to Vcc, and power up.

Does it work now?