Well, I can't really tell what's going on from that. One thing is that the template you posted doesn't have the tags matched - there's one more </div> than there is <div>.
Are you entering that template name in "Template to use"? If so, set "Template to Use" to block_html. Also, set "Cache Time (in minutes)" to 0 until you get it working, then set it to the number of minutes you want to cache.
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