Random thoughts ...

Have you told PICMATE to use MPASM rather than PM?
If yes, have you commented out the __CONFIG stuff in the 16f88.inc file in PBP folder?
Have you tried not setting the __CONFIG stuff in the program but rather in the inc file or at hex load time?
Does PICMATE offer any more on the errors? 235 does not show up on the MPASM list so it may be coming from PM or PICMATE.
Have you tried compiling directly (without PICMATE)?