Answer: was working, bit
Explanation: When two clauses from the past are connected by “as,” “while,” or “when,” one clause typically uses the past continuous tense and the other uses the past indefinite tense.

Structure:
As/while/when + past indefinite/past continuous + past indefinite/past continuous
Past indefinite/past continuous + As/While/When + past indefinite/past continuous

In the sentence above, the correct answer would be “was working, bit.”