You pull down the input weakly via the 10k series resistor (and the cap won't help, either), so it won't overcome the cca 500uA "medium" pullup (which starts to open when you start pulling down the input). So, once in one, you cannot pull it down externally. If you supply a zero from inside, it goes down, of course, and if in that moment you close the switch, it will remain low, and the capacitor most probably prevents it to get high again (from the brief moment of strong pullup) even if you write one to the port and then read it.

You just "guessed" exactly the most problematic combination of parts.

Matthew,

you are really not supposed to "debounce" the inputs using a RC circuit; rather, connect the contact DIRECTLY to the port pin (OK if you feel uneasy about this you might put a small series resistor, say 300 ohm at most); and then debounce IN SOFTWARE.

JW

PS. If you would follow my advice in http://www.8052.com/forum/read.phtml?id=144884 to the last letter (i.e. using a WIRE grounding the PIN of uPSD), you would most probably already understood what's going on... I know, it's hard to believe such a foolish advice...