Prescaling and CTC

Hi all,
I am a new and I hope this is the right section to ask for help.
I wrote this simple sketch just to test timer and interrupt.

# define LED 13

void setup()
{
  pinMode(LED, OUTPUT);
  cli();
  
  TCCR1A = 0x42;      // CTC mode
  TCCR1B = 0x01; 

  
  OCR1A = 65530; // Set compared value
  TIMSK1 = 0; // Reset Timer/Counter0 Interrupt Mask Register
  TIMSK1 |= (1 << OCIE1A); // Enable Output Compare Match A Interrupt
  sei(); // Enable interrupts once registers have been update
}

void loop()
{
  for(;;);
}


ISR(TIMER1_COMPA_vect) // Interrupt service run when Timer/Counter1 reaches OCR1A
{
  digitalWrite(LED, !digitalRead(LED));
}

It works, the LED blinks fast. But if I change the register TCCR1B with the value 0x03 (prescaler x64, but it's the same with 256 or 1024) the LED is ALWAYS on! Can anyone help me please? Thanks a lot!

Moderator edit:
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tags added.

I forgot: I'm working with Arduino Duemilanove

I had one like this when I first started so I I went through the tutorial again and it was ok. I still dont know what I did wrong the first time .

I have noticed however that when I prescale by 256 on my uno and then count down the system runs fast by about 3% which is a lot over a day but when I prescale by 1024 the system runs SLOW by abour 130 seconds a day. Better but still bad for data logging. And no my summs on the numbers to set the register to were not wrong!

IT must be something to do with latency Any body any ideas.