There are basically two things that could be stopping you display from working.
1. a problem with the PIC
2. a problem with the display.
To test 1....
I would assign an entire 8 bit port for the LCD eg PortB (just for test purposes) and connect LEDs to each bit. Also put LEDs on the pins of another port that you will use for the control lines.
Have a count run from 0-255 and output that to port B and observe that the LEDs count up correctly.
Likewise output all possible combinations on the pins you use for the control lines just to ensure that all your output pins are correctly configured and can successfully light the LEDs.
to test 2......
Once you know that you PIC is capable of driving all the required lines, connect up the LCD display in 8 bit mode and then try all the commands to get it working. Once you have it working it should be simple to change to 4 bit mode.
As far as I can see the only difference between 4 and 8 bit mode is in the initialisation which tells the LCD how it is connected. All subsequent commands should be the same, the only difference being that instead of sending a byte you have to send two nibbles instead which obviously takes twice as long.
I have had a further thought about something that caught me out a few weeks ago when changing to a different display. I didnt have the R/W line connected to the PIC, but I also didnt have it tied to anything either. The origianl display must have had some form of internal pullup/pulldown resistor as it didnt mind about the floating pin but the new display would not do anything until correctly terminated.
The second datasheet you mentioned for the actual controller chip has full examples of initialising in 8 and 4 bit mode so all the actual values you need are listed there. Ignore the fact that it is written in 8051 assembler just use the values in your PBP code. Being 44780 compatable means that it should work fine with LCDout so my bet is a misconfiguration of the PIC or a wiring fault unless you are really unlucky and have killed a piece of hardware.
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