[QUOTE=
Also are you using external 4.7k pullup resistors? The I2C commands set the SDA and SCL pins to tristate and only drive a low state. External pullups are needed unless you use "DEFINE I2C_SCLOUT 1" which defeats the clock hold capability of the MPC23016.[/QUOTE]

Yes, the data and clock lines are pulled up by a 4.7k resistor each. The 3 address lines are tied low.