nero
Cheers for the answer.
The rapid led on/off may be introducing extra spikes on top of the servo.
One thing you could try, is a capacitor across the 5v near the controller, or the servo.
Some servos may have them included internally, and others may not.
The tower Pro 955 is a high torque but I can't see any current ratings for it..
Its a long shot, but it could be noise on the supply line, upsetting the micro.
In theory your oscilloscope should show this with the LED and servo running (just use a resistor in series with the led, and put across the 5v and ground.)
It will appear as noise on the 5v, which disappears if you undo the servo control wire.
The digispark only has a 4.7uF capacitor across the 5v supply. It needs 47uF or 100uF for any load.
For those interested, A general rule of thumb for supplies is 1000uF per Amp, and more is better, but don't forget the 0.1uF as well.
Mark