I have the same book, so I'm looking at the diagram they give. It clearly shows that you have the points top and bottom.
Looking at the quilt from a mathematical perspective, the block is 12" finished. That means each quarter section is 6" finished. That means each QST section (consisting of a wedge from the strip made of two fabrics) has a base of 6" finished, or 6+1.25"=7.25" unfinished. So the directions are half right, in that the base of the triangles you're cutting should be 7.25". (I had some more text here before I edited, but it was wrong!!!) The height of the strip should be half of the 7.25" width of the base, which would be 3.625". But your strips are only 3.5", so your tips are being cut off. To fix this and still use the 3.5" strips, your base should be 7" instead of 7.25". Your block will then be a little smaller, but not much.
However... that said, I probably wouldn't use this block unless I starched the heck out of the strips first. Once you cut those triangles, all you have are bias edges, prone to stretching.
Last edited by dunster; 02-07-2013 at 08:34 AM.