C , Been mulling over your problem , think possibly there is more than one bug.. so here goes.
Bug 1 , the TX to RX link.... on power up reset both the 4520TX - 2431 RX pins are inputs... Question ... which PIC initializes its UART first ? if 2431 initializes first ( now faster at 20Mhz / 5 MIPS ) then UART RX pin is effectively a floating input
= Overrrrrrrrun error !
(try a 4k7 pull up).
Bug 2 , If you have programmed PIC with LVP enabled then for normal operations pin 26 PGM has to be grounded NOT open,. This was discussed previously , just wanted to make it clear.
Bug 2.1 What's happening with other 2431 unconnected pins ?
G.