I've rewritten the support for paddle controllers in Dual Atari configuration. Now the paddle position is sensed by the charging time of a capacitor.
The code was tested on the new board I have assembled using a ATMega88PA. Since it was a development version I did only the wires for one controller, tough it is enough to test a pair of paddles. The analog valeus are read as RX and RY axes, one for each paddle controller.
The new code was uploaded to GitHub