The core is fine. As I stated in this topic earlier, I used everything posted with no changes and it worked "out of box". Since there is no pin mapping with this core, I do not think pin 0 will work. I will verify this afternoon.
I tried setting the LED to 0 and it did not work. Try hooking pin 3 2 on the tiny and change int led = 0 to int led = 4.
--- EDIT ---
Never-mind. All digitals (PCINT0-4) "blink" except for PCINT5/RESET.
PCINT5 - VCC
PCINT4 - PCINT2
PCINT3 - PCINT1
GND - PCINT0