Lemme at least try to explain this properly (for once).

Both X and Y should be 0. If you are going to use the whole screen, set it to 20x15 (which is 640x480 pixels, Jazz2 resolution).
Remember to tile width and height (about to be explained).

Believe it or not, the top of the layer isn't necessarily the top of your viewing screen. Don't ask me why this is, but it's a real pain.

If you move the top of the selection somewhere in the middle and place the bottom part (that is cut out at the bottom) on TOP of the top piece it should look about right. Continue moving it up and down a bit to find the right place (I'm not exactly sure where).

Well, that's it then, ANOTHER explanation.