disabling the timer is quite important, each scan line in the signal must take 63( +/- 0.5)us, if the interrupt fires during the line generation, it will blow out the timing significantly, I will try to take a picture of what I get when the timer is NOT disabled, then you can compare what you're getting.
I'm not too sure how to disable it on the amtega8, but try using agent_orange's solution of 'cli();' somewhere in the setup() routine.
with regards to the 75ohm resistor, I can't be sure how critical it is, the most important thing is that you can generate 4 distinct voltages wrt the tv signal pin.
the voltages that you are aiming for are close to:
sync = 0.0v
black = 0.33v
gray = 0.66
white 1v
I was able to generate approx:
sync = 0v
black= 0.30
gray = 0.64
white = 0.95
Check your results with a multimeter first, to see what you get.
Good luck!
Oh, on a side note, I can't verify how correct the PAL signal is, (I don't have an oscilloscope) so I only know that this works on the 2 tvs that I have (which are both pal, but quite new).
If anyone has actually got this working, maybe they could post back with their resistor values and geographical location.
Al