Make sure both blocks you are using to make the square block are sticky. You can put a downward block on top of one and a rightward block on top of the other and the diagonal will be formed directly on top of the square block when the pistons trigger. The extra setup is moving the rightward block over to one of the pistons before getting onto the platform with the blocks. The third piston is for making the second diagonal, which happens after dropping back down from the platform.
I'm not super happy with how the puzzle turned out. I missed a lot of moves (mostly alternate ways to form the diagonals) and it ended up being more difficult and frustrating than intended, though I do know of two people who have solved the latest version without help.