there are more options to do debugging than wiggling a port pin but the debugging capabilities of the PSoC 5 do not eat into the performance of the chip at all. It is not a monitor program running in the background but rather dedicated hardware with dedicated communication channels.
There must be a different reason for the slower than expected blink frequency. Some clock connection appears to be off.
Hope this helps to steer you in the right direction.
Good to know.
I think I found one issue--I never selected what processor it was supposed to be for. I had to select that, in order to move to the next exampl (ADC&LCD). That worked, so onto the ADC&LCD&DAC&DMA--only to find out that Windows7 lacks Hyperterminal...