> Anybody working with an MPLAB ICE system, have you ever had the...

Remote possibility:
The ICE lets you choose where it's power (and clock) will come from:
either the emulator itself or the target board.  It requires about
100ma, which some target boards are not equipped to handle.  I'm
not an EE guy, so I don't know what a "standard switchmode psu" is
capable of, but perhaps you have target board power selected and
your power supply is struggling.

By the way, the random noise wave sounds kind of like what I get
when scope probes are hanging in air or or touching oddball things.
Are you sure your probes are healthy and properly connected?  For
these pins where you are expecting a constant 1 or 0, is the
behavior in software also flaky?

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