That doesn't seem too bad actually. If you are doing all the blocks and they are consistently 1/16 th of an inch off you will not notice even if the quilt is a tiny bit smaller then if they all would have been 8 1/2 inch blocks. when you sew them together make sure to piece them and "stretch" them to fit each other where they should meet. Also sew them together in blocks, like 4 blocks making a larger block etc. and making the blocks larger versus doing strips or long rows. Then when quilting, hammer them in place. LOL Lots of quilting to make them stay put. You'd be surprised how much you unevenness you can hide quilting.