Well I changed the code to this:

TRISB = %11111111 'set all pins 0-7 to input
TRISA = %00111100 'set pins 0,1,6,7 to output and pins 2,3,4,5 to input
CMCON = %00000111 'turn off on-board comparators

Include "modedefs.bas"

Low PORTA.1 'for LED
Low PORTA.6

Pause 500

SHIFTOUT PORTA.7,PORTA.0,MSBFIRST,[0\13, 131\8] 'send F reg
High PORTA.6 'LE high
PAUSE 10
Low PORTA.6 'LE low

high porta.1
pause 500 'blink LED
low porta.1

SHIFTOUT PORTA.7,PORTA.0,MSBFIRST,[0\9, 4000\12] 'send R reg
High PORTA.6 'LE high
PAUSE 10
Low PORTA.6 'LE low

high porta.1
pause 500 'blink LED
low porta.1

SHIFTOUT PORTA.7,PORTA.0,MSBFIRST,[1\1, 2566\13, 2\5, 1\2] 'send N reg
High PORTA.6 'LE high
PAUSE 10
Low PORTA.6 'LE low

high porta.1
pause 500 'blink LED
low porta.1

---------------------------------------------
No blinking going on and no highs on an scope from pin 18. Does this mean it is a bad chip even though it reads and writes fine? Or is there something amiss/wrong in my code?