This is a small howto setup an isometric map correctly (done for oblice2 on IRC, but this issue came up more than once).
The main thing I usually see going wrong is that the map tile width/height was not matching the actual tileset width/height. Which (especially in isometric mode) results in very weird results when drawing to the map.
Starting with the tileset:
You see that each tile has a width of 64 and a height of 32.
So create a new map like this:
Add the tileset like this:
Now you should be able to draw the tiles correctly.