Slightly bettered version
First of all you got the offset for Up/Down confused. Use a negative offset for Up and a positive offset for Down on the Y axis. I also added a pseudo-grid event (first event). It's more intuitive to work with this kind of stuff like this I believe.
EDIT: And I forgot something very important. You can't check like that for overlap of the same kind of object. You'll have to use the old trick of adding 2 families to your ground sprite (blue + green for example) and then check for overlap of those 2 families then instead.
With the slight changes I made it's at least possible to build boxes out of four ground pieces. But your events in the Tileset Events group don't really work they way you want them to. I already made something like this btw with my PUOP example (tell me if you want to see that source), but it didn't use offset (because I was too stupid back then or there even was no offset yet) and it did load the tiles from PNG files.
If you fiddle around with the events you should be able to get it to work. I just don't have time on my hands right now to set it up myself. Hope this helped a little already.