Erik,
Thanks
No I have checked.
Here is another important issue that I just found out if I diconnect the serial port another words no serial interuption then the program works great as well. I think this is a HW issue with the 87C520 or somthing is not setup correctly but not sure what am I missing.
This is how I setup the port

wdcon = wdcon & 0x7f; /* init port # 1 */
scon_1 = 0x50; /* init port #2 */
tmod = 0x25; /* Timer1 8-bit Auto-Reload, Timer0 as 16 bit*/

th1 = 0xfd; /* Set Baud Rate to 9600*/
tl1 = 0xfd;
tr1 = 1; /* Start Timer1 */
ti_1 = 0; /* Make Tx Ready */
ren = ren_1 = 1; /* Make Rec Ready */
ri_1 = 0;
IP = 0x40;
IE = 0x0E0;


Thanks
Ray B.