Hi Russ,
I think with your original pins (GPIO.0 and GPIO.1), and your second (inverse) code:

LOW GPIO.0 'INITIAL CONDITIONS
LOW GPIO.1

START:
HIGH GPIO.1
PAUSEUS 4168 ' HIGH TIME
LOW GPIO.1
PAUSEUS 4167 'DEAD TIME, BOTH LOW
HIGH GPIO.0 'SETS PIN 7 HIGH
PAUSEus 4168 'FOR 4.168 MILLISECONDS
LOW GPIO.0
PAUSEUS 4167 'DEAD TIME

GOTO START '60 HZ FREQUENCY

END

...and your diodes reversed and the resistor tied to ground (as skimask said).

Your two LEDs will not be on at the same time... (try it)

I still would like to know between which points are you measuring the wave (voltage) from?

-Adam-