I believe you may have a mismatch condition on the ports.

Try changing the following:
Code:
INTCON.1 = 0
HIGH GPIO.1
PAUSE 100
LOW GPIO.1
to:
Code:
temp = GPIO.2'read to dummy variable to clear mismatch condition of port (see s3.2.2 of datasheet)
INTCON.1 = 0
HIGH GPIO.1
PAUSE 100
LOW GPIO.1