If all you want to do is rotate the byte, try this:

char rotate_r(char val)
{
char a;
a= val>>1;
if (val & 0x01) // is the lsb ==1
{
a |= 0x80; //yep, pop it into the msb
}
return a;
}

Assembler handles rotating much easier than 'C'!

In the case where you may want to test a bit:

//
// returns non zero if the bit 'bit' is set in 'val'
//
char bit_test(char val,char bit)
{
const char bit_mask[8]={0,1,2,4,8,16,32,64,128};

return (val & bit_mask[bit]);
}