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Obviously one of the premises has to be false. I'm saying premise 1 is false because fatalism is false.

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I had no idea you seriously thought this thought experiment disproved determinism/fatalism. Here, I have one for you:

1) I create a computer program that prompts you to choose either "0" or "1" to predict what # the computer will next print on the screen.
2) If you predict correctly (by entering the # into the computer), you win $1million.
3) The computer will print the inverse of whatever you enter ("1" if you enter "0", and "0" if you enter "1") [and you know this].
4) You are unable to enter the predition of the # the computer is next printing on the screen.

Conclusion: the computer has free will, because you can't enter the prediction of what # it will pick, even though you know the exact rule it is using to pick the #.