My tiny261 definition file seems to have at least 1 error...the PWM1X bit in TCCR1B is missing! I did a device pack update, but that seems to have had no effect.
Is there a more recent version somewheres?...this one seems rather old:
;* Number : AVR000
;* File Name : "tn261Adef.inc"
;* Title : Register/Bit Definitions for the ATtiny261A
;* Date : 2011-02-09
;* Version : 2.35
;* Support E-mail : firstname.lastname@example.org
;* Target MCU : ATtiny261A
its not a big problem, just annoying--like a smudge on a window you just cleaned.