So, you're running at 4Mhz (INTOSC). The PBP manual tells us that at 4Mhz, pulsout has a granularity of 10us. Your loop runs from 200 to 1200, meaning 2000us (2ms) to 1200 (12ms). A bit out of the range of a normal servo ya think? Unless you've got one of the oddball ones...
Also, try turning off the WDT and Brown-Out reset for grins... You might be killing the battery voltage when the servo tries to move and causing a reset.
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