Just tested the output signal through a simple low-pass filter, then fed into my Heathkit IO-12 oscilloscope. Showing a pretty nice sine wave so far. I'm not exactly sure if it is the correct frequency, but at least it's a sine wave.
UPDATE: It should be 261.626Hz, and the there ~3.5 periods on the display, which is refreshing at around 80Hz if the knobs are correct. (261.626Hz)/(3.5) = 74.75Hz; So this is pretty close, and I am betting that the oscilloscope is the inaccurate one here, as it is very old, the knobs are loose, and it probably hasn't been calibrated for a long time, if at all. (Also I dug it out of my school's E-Waste)
My old (but only one I own) oscilloscope:
The STK500 with the ATtiny26 in my crazy ribbon-cable based 20SOIC to 20DIP breakout, with signal from OCIA is fed into a Low-pass filter consisting of a 1k resistor and 100nF cap, which then goes to the oscilloscope.