ATMEGA328P-PU boatload

You did upload Arduino ISP to the Uno board first?
Yes I did, and switch programmer to Arduino as ISP

You should try .1uF capacitors across VCC and Gnd on the atmega328p-pu.
Already done

You could also try selecting Arduino Uno instead of "Arduino on a breadboard" since you have a 16MHz crystal on the chip.
Already done :confused: