Arduino as ISP with the ATtiny85

I'm having troubles programming the ATtiny85V using the Arduino as ISP.

What happens is the (Arduino) programmer times out and I get:
avrdude: stk500_paged_write(): (a) protocol error, expect=0x14, resp=0x64
avrdude: stk500_cmd(): programmer is out of sync

The Arduino as ISP seems to work fine. I changed the line delay(40) in ArduinoISP sub heartbeat, and the heartbeat LED pulses and there's some initial data LED blinks, then things stall. (I tried both Uno and Nano as programmers).
It's as if the ATtiny85 is not responding (I tried a few new ones). Using Arduino IDE 1.0.4, settings are tiny85 internal 8MHz, but I also tried 1MHz.

Have a 10uF cap on Arduino RESET line.

So I'm not sure what to check; usually I'm up against fusebits when this happens? To set the fusebits, I read you select a clock speed and "Burn Bootloader" (even though you can't put one in the 85). I thought "out of the box" the Attiny is running 8Mhz internal RC oscillator.

I'm using the MIT high-low tech ATtiny library and instructions Index of /

check your connections, its usually the issue

the MIT thing has lots of timing issues as they didnt make a proper core, google arduino tiny

I was just tinkering with that today. The how-to video on how to shrinkify your arduino calls for a 10uF 50V capacitor across the Arduino Uno Reset and GND pins, but that caused an error when I followed the MIT instructions. Removing the capacitor fixed the issue for me.

I've not had problems with MITs core; have burned many ATTiny85s and 84s.

OPs steps appear to be correct. Probably a silly wiring mistake or maybe a bad chip?

Chagrin:
I’ve not had problems with MITs core; have burned many ATTiny85s and 84s.

problem with it is it uses the stock 16Mhz core, stray from that and it starts having timing issues, which is an easy fix, but why when arduino tiny supports the x5, x4 and 13 series in multiple speeds out of the box