LCD will not start

[skimask]

ski,

I like your 'heartbeat' practice. I would adapt it as my practice too.

Regards,
JohnPaul

Put a voltmeter on the OSCx pins. You should get around 2.5v with an external oscillator, or if you've got OSC2 setup as an Fosc/4 output.
I wouldn't think you smoked a chip...as has been noted before, PICs are fairly tough chips, not unbreakable, but tough.
And if for some reason, your PIC is running on the 48khz internal clock, your program will run about 83 times slower than it should...in other words it'll take 166 seconds for your LEDs to blink.