I'm having trouble changing the terrain.
When downloading seablock modpack 0.5.1 this mod is then included in the pack.
The starting 1k sand when rotated (R) is still very much sand and nothing else.
Perhaps this mod only works when using mud?

Sounds like it's working as expected. Pressing R will cycle through the different sand variations. As you noted, the other terrain types can be crafted from mud.

Additionally, Sea Block has a startup setting which allows you to pick your default terrain type. This will affect what type you start with as well as the Crushed stone > Landfill recipe.

You can change this setting at any time. Changing it won't alter what you already have but will change all future landfill crafted from crushed stone.

Also note that in Sea Block v0.5.3 (not yet released) Mud > Landfill is getting a significant buff - having it's cost reduced from 25:1 mud:landfill down to 5:1.