I read your page on interrupts and I look forward to using you code to calculate frequency by checking the period in a project of mine in the future.
For this project, can the 1 Hz signal be feed to T1 (D5) and the counter continue to count even when the processor is a sleep? If the value 3600 (or 3599) where placed in the CTC register. Could an interrupt be generated to wake the processor?
Because of the synchronization process, the processor clock could not be stopped. So as noted in http://www.gammon.com.au/forum/?id=11497
the SLEEP_MODE_STANDBY "...similar to power-down mode, except that the oscillator is kept running." If that is the case then will counter 1 continue to accumulate until it reaches 3600, raise the interrupt, and wake the processor in one hours time?
As I see it, the greatest advantage to this is that a DS1307 and a crystal is less than a dollar (US or Australian). The only question would be, is it saving enough power to make it worth it? I would think that if you are putting your processor to sleep, there is a good change you will want to know the time when you wake up, but maybe not.