Lots of good diagnostic questions so far, so I'm going toss in a few more:

Were you whittling or scraping the magnesium? Don't carve it off, all you'll do is ruin the edge on your knife, scrap it with the back of a piece of hacksaw blade or something (or a file works pretty spiffy here). The other thing is, whan you scraped the ferro rod, stainless steel works but not so well. Carbon steel, or the spine of that piece of hacksaw blade I just mentioned. Even a lower chromium stainless like what Victorinox and Leatherman use in there saw blades is going to work better than any of the "brighter" stainless steels. Carbon good/chrome bad.

I know the book says the size of a nickle- try going for a quarter sized pile, and it absolutely has to be contained. It should be on the tinder, but not in it, that pile is the amount that is a solid layer.

For blowing, air is good, but think of it as VERY long puff. Or the exhale during a long kiss (best way I can describe it folks, sorry).