Once ive had similar problem - also my lcd was flickering. Reason for that were shorts at lcd connector. You may make a test: measure all points when lcd is working properly and do the same when is flickering. You can also have broken/damaged lcd. But i strongly advice you to check soldering points first.
Double check then lcd interconnections pin to pin especially they not 1:1 compatible <easy way for trouble. When you will be sure tthat here is everything fine check maybe core pcb. Problem may be with PIC socket if you have. If you have possibility check lcd in another device or another lcd with core. You can use almost anyone 1602, 2002, 4002, 2004 - without uprgrading softare. Just connect - they will only not shows properly if not the same as you had previously. I check lcds that way everytime - connecting them to working device in place of display that this device had/normaly have.
P.S. Bad soldering tin often makes bad soldering points;)
Im not sure about 8 bit, there may be necessary to upload new setup with “turned on” that option. Its only my speculation because i never did it in MBSID. So leave it now as is. If you have this second project ready waiting only for lcd then use this one you have - also it will tell you about its condition.
Once in the past ive read about flickering in 4 bit mode and someone changed it to 8 bit with success. These time intervals: 10 mins.. 20 mins says its probably reason with current flow. Sometime “cold solder points” (as we call them here) produce that interresting visual effects;) Reasons for that are: bad tin, too low temperature of soldering iron, dirty legs/pads etc.
Check all this path around lcd connector points.
Another MBSID functions work properly when display is flickering? Maybe problematic place is a distant place;)
Maybe you have inefficient power supply or maybe 7805 is oscillating… many possibilities here.
Anyway just for info: ive bought blue 1602 displays on ebay and they cost me 2$ each with shipping. Unbelivable:) Ive bought 8 of them and i have no idea for what;)
I have the same but negative red < im big fan of reds;). I made special adapter for simpler interconnections if they 1:1. Just what i need is to solder IDC sockets and this adapter itself to lcd. Interconnection are via ribbon cable with squeezed plugs. All job is fast and im 100% sure. Cheers:)
)