long countdown timer, how to save power?

[skimask]

Does that sounds like it should work?

Yep, that's one good reason why Timer1 works the way it does.
There's a good explanation on DS39605F-page 107 of the datasheet along with some assembly code on how it all works.

EDIT: adding a thought... I don't know what would take more power to run and/or be more accurate (a trade off here)...
A self powered RTC with it's own internal clock that you read once in a great while with a PIC that's sleeping most of the time......OR.....
A PIC that's woken up X times per second (or less) to update a number internally and put back to sleep...