I'm not using a bootloader at all. I'm trying to load the code hex file directly to the chip via ISP with the AVRISPmkII. If it's any help at all I just realized that Atmel studio is throwing an error message "[ERROR] Failed to enter programming mode. ispEnterProgMode: Error status received: Got 0xc0, expected 0x00, ModuleName: TCF (TCF command: Device:startSession failed.)". I can't make heads or tails of it though.

Yep, the ISP is connected correctly. I'm not actually trying to put a bootloader on it, just trying to get the programmer to recognize it.

Same goes for me. I once blew up a nice SCR because I had forgotten to to use a diode across the motor. It ran few seconds but the next time I switched it on, nothing happened.

Yes, I've checked my wiring multiple times and it seems to correct. My worst fear is that the chip might be blown from static damage but that's unlikely since I've used several atmega328s without blowing them up. I really have no idea what steps I should take to try and fix this problem. Any input appreciated.

Blow through the hole while solder is molten, usually works.

I just bought an ATmega2561 off of digikey to use in a project ( http://www.digikey.ca/product-detail/en/ATMEGA2561-16AU/ATMEGA2561-16AU-ND/735457 ) and I made a breakout pcb to test and program it. Unfortunately, when I hook it up to my AVRISPmkII and try to program or read the chip in Atmel studio 6, I get a "cannot enter programming mode" error no matter what the clock speed is. I've tried providing an external clock in case that's how the fuses were burnt when it was shipped to me but I can't get it to work at all. Does anyone have a suggestion on how to get my AVRISP to talk to the chip?

Why do you need Giveio?

Giveio lets avrdude and other utilities talk to the parallel port, which, according to OP, isn't working.

I was doing all my testing with the 5v on the arduino so current wasn't the problem. Just tried with another MOSFET and it seems to be good except that I'm still getting 2-10uA of leakage from the drain. While this won't be a problem in the final design I'd still like to know why this MOSFET is leaking 10uA while the IRF I mentioned leaks 0.0uA. Does 10uA sound feasible as flux residue leakage?
Also, throughout the time that I've been writing this post, the led sometimes suddenly goes very bright when the gate is @ 5V. However, when I get close to it to measure the current the led turns off again. I seem to have some weird noisy gate here. Leakage current seems to have settled down to 0.0uA though.

voltage between source and gate is in the millivolts, probably not a problem. However, I'm able to pull anywhere from 100uA to 10mA (it seems to just float around) from the drain when the gate is high and as would be expected with such high leakage the led is still bright when gate is at 5V. I figure either the thing is blown or I'm no good at soldering .6mm pin pitch components (let alone hand drawing the circuit board with a sharpie!) and I might have a tiny bridge or parasitic current flowing through flux residue somewhere. Seeing as the intended purpose for the MOSFETs was a switch to connect and disconnect a battery from it's charger the slight leakage might be OK, but I was also planning on using them as an LCD backlight on/off/PWM control in which case they would certainly need to turn off! I'll test out the other MOSFETs tomorrow and see if I get similar results,

FWIW: Rds with gate @ 5V (measured with multimeter across drain and source  probably not the right way) is 8+ megOhm although that's not not what the drain current is telling me.
Rds with gate @ 0V ~ 0.1 ohm

Voltage drop across drain and source, gate @ 5V = 200 - 3000mV
Voltage drop across drain and source, gate @ 0V ~ 0mV

Voltage at drain, gate @ 5V = 2 - 4.7V, corresponds with above figure
Voltage at drain, gate at 0V = 5V

it couldn't find the giveio program

Did you install giveio? (Direct download link: http://web.mit.edu/6.115/www/miscfiles/giveio.zip) A parallel programmer would probably be the easiest way to burn the bootloader IMO (without an actual programmer).

I bought some P-channel MOSFETs recently: (http://www.vishay.com/docs/73253/si1403bd.pdf) and I'm having more trouble than expected getting them to work properly. I'm hooking them like this: (http://img594.imageshack.us/img594/7159/mosfet.jpg) and there seems to be no way to turn the things off! If I put 0V on the gate it turns on as it should, yet if I put 5V on the gate it seems to go linear but not completely turn off. Even it I put 2.5V to the source (through a voltage divider) and 5V to the gate it still won't turn off. This MOSFET on the other hand works perfectly: (http://www.irf.com/product-info/datasheets/data/irf9540n.pdf). Can anyone help me out?

Ok, 2K2 it is then.

Voltage dividers were indeed plan B. Eventually I'll force my self to buy a real programmer but for now I think I'll manage to get by without one.

My next project will have an atmega1281 (2.7 - 5v operation voltage) running at 3.3v. The only way I can program it however is with a parallel programmer http://arduino.cc/it/Hacking/ParallelProgrammer which, of course runs at 5v. So I'm wondering if I'll blow up the chip when I try to program it since I'm running at 3.3v. When running at 3.3v are the pins still 5v tolerant?

Ok, I'll use 4k7 then since I'm going to use 400kHz.