I have found the problem, but I'm not sure why it is happening. I had a sharp infrared sensor connect to the power supply but no control signals hooked to the pic. When I disconnected from the supply, the pic started communicating with Microstudio.
I have a 1uf capacitor close to the max232 which shares a supply with with the pic. I don't know why this would be happening. It worked fine when I had the 16f876 on the supply.
Any ideas on that?

Thanks for the help.