Binary sketch size: 1018 bytes (of a 32256 byte maximum)C:\Program Files (x86)\Arduino\arduino-0022\hardware/tools/avr/bin/avrdude -CC:\Program Files (x86)\Arduino\arduino-0022\hardware/tools/avr/etc/avrdude.conf -v -v -v -v -patmega328p -cstk500v1 -P\\.\COM2 -b115200 -D -Uflash:w:C:\Users\MyUser\AppData\Local\Temp\build7843312685296780230.tmp\Blink2.cpp.hex:i avrdude: Version 5.4-arduino, compiled on Oct 11 2007 at 19:12:32 Copyright (c) 2000-2005 Brian Dean, http://www.bdmicro.com/ System wide configuration file is "C:\Program Files (x86)\Arduino\arduino-0022\hardware/tools/avr/etc/avrdude.conf" Using Port : \\.\COM2 Using Programmer : stk500v1 Overriding Baud Rate : 115200avrdude: ser_open(): setting dtravrdude: Send: 0   avrdude: Send: 0   avrdude: Send: 0   avrdude: Recv: avrdude: stk500_getsync(): not in sync: resp=0x00avrdude: Send: Q   avrdude: Recv: avrdude: stk500_disable(): protocol error, expect=0x14, resp=0x51avrdude done. Thank you.
Do you have a black jumper wire shorting pins 7 (Vcc) and 8 (GND)? Hard to tell for sure, but it looks like it in the photo. This would be a bad thing.
Other suggestion is to put a 0.1uF ceramic capacitor across 7 - 8.
I saw the caps at the Vr, but assumed they were electrolytics of much higher value. I keep 0.1uF MLCC's handy in my box of jumper wires and use them as close as possible to supply pins of IC's, especially when a breadboard circuit isn't working for unknown reasons. Jim