The only thing I can see is at the top where your black square is, you didn't ease the batik long enough to match the end even and then the same thing on the bottom left where the batik square is your middle strip doesn't come out even. That's your 1/8" your missing. When I cut my 5" squares I don't put the ruler right exactly on the fabric so the fabric is under the 5" line. I put that 5" line so I can see the edge of the fabric barely. Don't know if that makes sense, kind of like sewing a scant 1/4", I'm cutting a scant over the 5" square. I don't use the lines on my cutting mat either, I use the ruler to measure. If you are going by your mat and cutting every 5" with every cut it's going to get a tad smaller because of the cutting line.
I know you have to upload differently with Win8, can't help you there! I've been waiting for the next Windows to see if it's better before I buy a new one. Tried the Win8 and hated it..