The hardware I2C on the ATMEGA168 uses the same pins as Analog 4 & 5. So when I2C mode is enabled, these pins get converted to digital signals for the I2C connection and you can no longer use them for analog. Since this is how the ATMEGA168 is built, you can't use other pins for hardware I2C.
There were some people working on a software I2C that could use different pins. Search the forums for this.
Understood, but I don't think this is my problem; I'm using the standard i2c pins, analog 4 and 5; and somehow that's screwing up digital pins 8, 11, 12. Does "i2c mode" disable/change other pins?