Timer2 Interrups REFUSE to work! :(

May I suggest you learn how to use the "quote" button above the posting box? Putting your comments and other people's all together looks confusing. eg.

Yes, but I am using > not >=. So anything greater than 59 (60), will go back down to 1. Course I need to add 0s to it but havnt yet.

60 is not the only thing greater than 59. For example, 61 is. And since you are adding 8 it is more likely you will get from 56 to 64.

  seconds += 8; //We sleep for 8 seconds instead of 1 to save more power
  //seconds++; //Use this if we are waking up every second

  if(seconds > 59){
    minutes++;
    seconds = seconds - 59;
  }

My point is that after adding 1 to the number of minutes, surely you need to subtract 60 from the number of seconds? Not 59?

They are not used at the moment, they are just places for xtal load caps but I havnt loaded the crystal at all.

So the circuit you posted is not the one you are using?