Last night I finally found the time to populate the display driver board. I did not populate the I2C pull up resistors because these can easily be added later if needed. The AVR should have internal pull ups on those pins. I also started testing with a Atmega328P vs an Atmega8 due to familiarity. These chips will be swapped later.
I have tested setting fuses and programming via iscp, burnt the bootloader and was able to flash with the boot loader. So the programming chain looks good. Next step would be to verify the functionality of the rest of the hardware.