Thanks to all who posted replies to my problem! I have solved it!
The source of the trouble was improper setting of the OSCCON register.
For those who look at my last post including code, I posted code from
the revision BEFORE I tried the postscalar setting that Jan-Erik suggested.
Sorry. The postscale vale is selected by bits 6-4 of OSCCON and were set
properly for a 1:1 ratio. Where I went wrong was in OSCCON bits 1-0, the
system
clock select bits which must be set for internal oscillator block when using
the
internal oscillator.
Strange thing is that a blink a led routine works on internal clock
even if these bits are incorrectly set and the processor DOES run.
If the USART is being used with the internal oscillator, these bits
must be properly set for oscillator mode you are using (My observation,
 it may not be accurate - comments?).
Again, thanks to all.

Regards,
Stephen D. Barnes

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