I think you're getting somewhere. Don't quote me on this, but I think with Iwagumi, the 2 largest rocks should be next to each other, but pointing in opposite directions, with the larger one closer to the center of the tank. I also think a smaller 5th rock could help balance things out.
As for the substrate, have you though about adding some finer sand on top? Having the substrate finer, should make the rocks appear a little larger.
Good Luck! I've always loved pico tanks, but the can be a real PITA