I don't know the picoblaze very well, but I think the basic delay is pretty generic to all MC's.
1) Initialize a register ( or a memory location ) with a value that determines the delay ( that value will be calculated in a moment )
2) make this the top of your loop. If the register, or memory, from step 1 is zero, branch to your LED lighting code
3) subtract 1 from the register or memory.
4) (optional) do something to waste time, ie a faux i/o operation
5) branch to step 2.
Now, add up all of the cycles used up in your loop. Multiply them by the clock period, then take the reciprocal. This becomes the number you use as the initial value in step 1.