Attiny85 "shrinkifiying" problem... so frustrating

please define PAGEL and BS2 signals in the configuration file

This is to do with parallel programmers only. As we are using ISP (In Serial Programming), they are not relevant.

As a side note, to avoid confusion later on, there is a bug in the compiler shipped with Arduino which prevents programs >4k being compiled for the ATtiny85. If your program is ever larger than that, you end up with cryptic error messages. There is a patch for this issue here: http://arduino.cc/forum/index.php/topic,116674.0.html
It may be worth applying it now if you haven't already to avoid confusion (its very easy, just involves replacing one file with another).