Custom Arduino on Prototype Board using ATmega328p.
Schematics and Video:
Did I see correctly that you powered the Atmega328p directly with a 9 volt battery? That could kill it soon! They have a maximum voltage limit of 5.5 volt.
Also your design is lacking buffer capacitors between Vcc and GND. It might work when it it is running standalone like this and doing nothing. But switching noise on Vcc might cause problems (powerglitches, brownout) at some point with additional circuitry.
Adding on to Valen’s post, you state that you “developed” that board. You may have designed and assembled the board, but the development of the 328 was done years ago.
We built our first prototype Arduino board after a few days working on it on and off and also the schematic design
Or spend a pleasant hour following the instructions (and a design that is actually correct) here: http://playground.arduino.cc/Learning/AtmegaStandalone