This is where I got to last night with an AXE200 vB.2. Seems to be just the same as yours.
#terminal 9600
pause 5000
let dirsc = %00000010
SETTIMER COUNT 65535
do
pause 500
inc w2
w1=timer
w0=pinsc
sertxd ("After inc w2=",#w2," w1=",#w1," w0=",#w0,cr,lf)
high c.1
w1=timer
w0=pinsc
sertxd...