Displaying Subcategory Blocks Magento 1.9.2

Question

I'm having trouble displaying subcategory blocks in Magento. I have followed several solutions posted on here and this tutorial.

I created a static block with this code:

{{block type="catalog/navigation" template="catalog/navigation/subcategory_listing.phtml"}}

I also tried placing it in page/html/ as this was a solution I saw elsewhere.

Next I updated the settings on all top categories to:

Display mode: Static Block only

CMS Block: Sub Category Listing

Then I created the subcategory_listing.phtml file:

<div class="category-products">
<ul class="products-grid">
<?php
$_categories=$this->getCurrentChildCategories();
if($_categories->count()):
$categorycount = 0;
foreach ($_categories as $_category):
if($_category->getIsActive()):
$cur_category=Mage::getModel('catalog/category')->load($_category->getId());
$layer = Mage::getSingleton('catalog/layer');
$layer->setCurrentCategory($cur_category);
$catName = $this->getCurrentCategory()->getName();
if ($categorycount == 0){
$class = "first";
}
elseif ($categorycount == 3){
$class = "last";
}
else{
$class = "";
}
?>
<li class="item <?=$class?>">
<a href="<?php echo $_category->getURL() ?>" title="<?php echo $this->htmlEscape($_category->getName()) ?>"><img src="<?php echo $_category->getImageUrl() ?>" width="100" alt="<?php echo $this->htmlEscape($_category->getName()) ?>" /></a>
<h2><a href="<?php echo $_category->getURL() ?>" title="<?php echo $this->htmlEscape($_category->getName()) ?>"><?php echo $this->htmlEscape($_category->getName()) ?></a></h2>
</li>
<?php
endif;
if($categorycount == 3){
$categorycount = 0;
echo "</ul>\n\n<ul class=\"products-grid\">";
}
else{
$categorycount++;
}
endforeach;
endif;
?>
</ul>
</div>

and finally in app\code\local\Mage\Catalog\Block\Navigation.php I changed the getCurrentChildCategories() function to this:

public function getCurrentChildCategories()
   {
        $layer = Mage::getSingleton('catalog/layer');
        $category   = $layer->getCurrentCategory();
        /* @var $category Mage_Catalog_Model_Category */
        $collection = Mage::getModel('catalog/category')->getCollection();
        /* @var $collection Mage_Catalog_Model_Resource_Eav_Mysql4_Category_Collection */
        $collection->addAttributeToSelect('url_key')
            ->addAttributeToSelect('name')
            ->addAttributeToSelect('is_anchor')
            ->addAttributeToSelect('image') 
            ->addAttributeToFilter('is_active', 1)
            ->addIdFilter($category->getChildren())
            ->setOrder('position', 'ASC')
            ->joinUrlRewrite()
            ->load();

        $productCollection = Mage::getResourceModel('catalog/product_collection');
        $layer->prepareProductCollection($productCollection);
        $productCollection->addCountToCategories($collection);
        return $collection;
    }

This answer suggested it might be an issue with Magento caching static blocks, however disabling the cache on Blocks HTML makes no difference. Does anyone have a solution? is there an extension I can use instead?