Susie - you just made my day having read all of the posts on this topic! Not that I'm happy it was operator error, but I am definitely happy that you were able to figure it out.
The templates are accurate. They have been tested and used successfully at least twice (by Lisa who made the Buttons and Blooms version of the quilt, and by me), and there are lots of photos in the Show and Tell from successful Month 1 finishers.
I'm thinking the circles are not laying flat because either the templates have not printed accurately (you need to measure across 4 squares to get 8" in both directions) in which case you will need to find a printer that does print accurately; or the seam allowance used is too big.
Given that I am English and spent the first 28 years of my life printing onto A4 paper, it didn't occur to me that the stuff still exists! I will make sure that templates for months 2-12 can be printed onto A4 paper as well as letter paper.
Sarah