Well, somehow I fixed it.
I looked into my .bashrc file, and under the pspdev export paths section, there was 3 different export path lines. I had copied them there from an earlier installation of pspsdk. However, this website,
http://wiki.ps2dev.org/psp:programming_faq
only listed one export path line (it was updated I am assuming). So I tried deleting all my old lines and copying the new line from the website. That made everything work, however, whenever I started up the bash shell, it would spit out several ": command not found" lines before showing the prompt. But after that it would work fine...
That just bugged me, so I tried one thing that I thought might work, before completely reinstalling my cygwin installation. I deleted my home/(username) directory. Just the username directory, not home itself.
I started up the bash shell again and it went through it's initial setup process, creating the directory and it's files I had just deleted. I re-copied the export path line from the website into my new .bashrc file, saved. And started up bash shell once again.
There were no more ": command not found" lines
and it compiled fine, and seems to work just fine now.
So anyways make of that what you will, and thanks anyway "insert_witty_name" for your help.
Ask not for whom the bell tolls, it tolls for thee, besides, I'm playing my PSP, tee hee!
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