When I ordered the chips from Digikey, they came with the fuses set in the atmel default configuration which is DIFFERENT than what is set on the Arduinos (by default they are set to use the internal osc. instead of the external crystal on the arduino, they don't have the bootrst set, no brownout, etc).So, when avrdude tries to read the device signature, the default 500kHz bitrate is too high, so you get back a garbage signature (sometimes it gets lucky and it read correctly, but mostly it was just garbage)You have to lower the mkII's ISP freq to a speed supported by the default chips, fix the fuse settings, and then crank the speed back up on the mkII. Once you do that the chips work fine with the Arduino environment. I've been programming them all afternoon without hitch.
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