Originaly I had it withought the overlay flag, the grass appeared white also. I was also getting a wierd white box outline of the grass square withought the overlay flag.
This is what it looks like withought setting the OVERLAY flag:

(It is kinda hard to see, but look at the grass that is close but at the far right, and also the grass at the back, they all have a white outline square around the texture)
Also withought the overlay flag the grass can be seen through the cube when it is not supposed to:

(In the picture above the camera is below the dirt/grass cubes, but you can see the grass through them withought the overlay flag)
Anyone else know how to fix the white grass problem?