You could go even cheaper than that and use a 12f675, that has a comparator, as well as an 8-bit ADC (or is it 10 bit?). The 12f629 is the same, without the ADC. An ADC will make life easier. These are $2 ? And are pretty much designed for low power.
However, considering you're using a quite clever way of measuring an analogue signal with an RC oscillator, and your input is all digital, you could use a 12F509, or even the 10f series PIC's ..... SOT23-6, tiny, and very low power consumption. Software PWM is fast enough for dimming an LED, especially if you use the on board timer.
Certainly the propeller uC is over kill, but I guess your decision would be the support you have available. If you don't have a programmer or the compiler for certain micro's, things start to add up.
Avr's can be another option, but the smallest ATtiny series (8 pin jobs) generally have higher power consumption than PIC equivalents, but with many on board peripherals (ADC, and several PWM's at a minimum), pricing would be on par with PIC's at around $0.60 - $2.