Is my Arduino really doing FFT?

Using Arduino Audio
19

I have the code from Magician's Audio Input to Arduino http://coolarduino.wordpress.com/2012/06/22/audio-input-to-arduino/ and I have a problem with it. The timer1 and the audio sampling are correct, but I have this weird "bounce" effect that happens whenever I change the value of the analog input.
I have a switch hooked up to the input now just to change the extremes from 0 - 255, but I know that this "bounce effect" is not caused by the switch itself because the Arduino does this when I change the audio input using a potentiometer.
All I have hooked up is a 10K pulldown resistor and the input from the switch going to pin A0. Here is the code I used. I stripped it down to the bare minimum to isolate the problem. I also have a 8X8 LED Matrix hooked up via 74HC595N shift registers. The problem is not in them though because I have the Arduino Serial output into a processing bar graph, which shows the sudden spikes in the values, which look just like a switch de-bouncing. I think the problem is in my code, but I have absolutely no idea where it could be. I don't think magician's original code is supposed to do this.

#include "TimerOne.h"

#define FFTSIZE 16
#define ROWS 8

int input[FFTSIZE];
float output[FFTSIZE / 2];
float sine;
float cosine;

boolean finished;

static uint8_t  n_sampl;

int16_t temp;

int counter;
int k;
int threshold;
int rowCounter;

const int latchPin = 8;
const int dataPin = 12;
const int clkPin = 11;

int freeRam () {
  extern int __heap_start, *__brkval; 
  int v; 
  return (int) &v - (__brkval == 0 ? (int) &__heap_start : (int) __brkval); 
}

void setup() {
  pinMode(latchPin, OUTPUT);
  pinMode(dataPin, OUTPUT);
  pinMode(clkPin, OUTPUT);
  pinMode(13, OUTPUT);

  Serial.begin(9600);

  ADCSRA = 0x87; // freq = 1/128  125 kHz. 13 cycles x 8     usec =  104 usec.
  //ADCSRA = 0x86; // freq = 1/64   250 kHz. 13 cycles x 4     usec =   52 usec. 
  //ADCSRA = 0x85; // freq = 1/32   500 kHz. 13 cycles x 2     usec =   26 usec.
  //ADCSRA = 0x84; // freq = 1/16     1 MHz. 13 cycles x 1     usec =   13 usec. 
  //ADCSRA = 0x83; // freq = 1/8      2 MHz. 13 cycles x 0.5   usec =  6.5 usec.
  //ADCSRA = 0x82; // freq = 1/4      4 MHz. 13 cycles x 0.25  usec = 3.25 usec.

  ADMUX = 0x40;
  ADCSRA |= (1 << ADSC);

  calibAudio();

  Timer1.initialize(150000);
  Timer1.attachInterrupt(audio);
}

void loop() {

  LEDDisplay();                          // to be filled in later
  
  finished = true;
}

void calibAudio() {
  for(counter = 0; counter < 32; counter++) {
    if(ADCSRA & 0x10) {
      temp = ADCL;
      temp += (ADCH << 8);
      ADCSRA |= (1 << ADSC);
      threshold += temp;
    }
  }
  threshold /= 32;
}

void audio() {
  digitalWrite(13, HIGH);
  if(finished == true) {
    if(ADCSRA & 0x10) {
      temp = ADCL;
      temp += (ADCH << 8);
      ADCSRA |= (1 << ADSC);
      input[n_sampl] = temp - threshold;
    }
    if(++n_sampl >= FFTSIZE) {
      n_sampl = 0;
    }
    finished = false;
  }
  digitalWrite(13, LOW);
}

void LEDDisplay() {
  for(counter = 0; counter < FFTSIZE; counter++) {
    digitalWrite(latchPin, LOW);
    shiftOut(dataPin, clkPin, MSBFIRST, B11111111);
    shiftOut(dataPin, clkPin, MSBFIRST, 255 - input[counter]);
    shiftOut(dataPin, clkPin, MSBFIRST, 255 - input[counter]);
    shiftOut(dataPin, clkPin, MSBFIRST, 255);
    digitalWrite(latchPin, HIGH);
    Serial.println(input[counter]);
  }
}

Any help would be great.

Thanks,

Judd