I could swear that I tried this once, and the two squares cut on the diagonals to make the four triangular corners should be the same size as the middle square (or four patch) in this case. I believe this gives you a quarter inch seam on the points, so if you want the middle square to float, you would cut bigger, as mentioned above. You could iron the squares on the diagonal and use the pressing line to match up to the middle of the four patch.
Think I'll have to play with this block again...