Software I2C - ATmega8
OK let me cry till morning...

i was having this issue during day, but the solution was sooo easy

i need to pay attention more ...


  i2c_start(addr | R/W-bit)
  Initiates a transfer to the slave device with the (8-bit) I2C address addr. 


what i was trying is to push 7 bit address.

i hope this might help some others.

Thank you for help.