Rob,
it's a lovely rewrite. It does seem I get into an endless loop. After entering the ISR for the first time it doesn't get out, tested with div64. However, I can't see the error. It's hanging on the lines while ( (PIND & B00100000) == 0) ;, if I comment them the ISR runs. I just don't see why the ISR would stay in that while loop.
Jack