A cursory glance at the code reveals some fundamental issues :

* INIT is called for every loop of MAIN. Is this what you intended ?

* You are supposed to scan 8 switches and without a slicing scheme that allocates a finite time for each switch, you are going to end up missing many switch presses. ( In the absence of any introductory remark, I guess you want to scan 8 switches as you are comparing with the State Machine Tutorial )

* Uncommented code. And the few comments that are provided are translations of the Instruction. In the absence of the comments, commenting on the correctness of your code is next to impossible. And when you comment code, obvious goof ups surface at a glance.

Raghu