How hot was your iron? I have not seen the book, but from what I have seen online you are supposed to use medium heat, a dry iron, and a layer of parchment paper between your iron and the surface. When I looked at Mod Podge ingredients online, varnish was a component. I don't think I would want to iron varnish!
Edit: I would definitely email the author of the book about this problem to see if she is using a different product than you used.