Your squares are a little small. They need to be half the width of the rectangle plus 1/4" each. Your rectangles is 2.625" wide. 2.625/2= 1.31+.25=1.56". So if you stay with these measurements, you need to cut the squares closer to 1.6" rather than the current 1.5. Not very easy to do with our rulers. You wouldn't think 4/10 of an inch would make that much difference, but apparently it does. I'd use 1 3/4" by 3" for the rectangle and 1 3/4 by 1 3/4 for the squares, then trim them to the needed size.
http://www.allpeoplequilt.com/techni...geese_ss1.html
Once you get these figured out, it will be easy. I know I lost a day with my FG trying to find a method and a size I liked.