In my opinion, for this to be successful, a few conditions must be met. First, you must have a great return policy and prompt shipping for people wanting to swap the blocks. The biggest concern to me would be getting a block I don't like, then having to wait another two weeks for you to get the first back then send the second. Maybe being willing to send the second one out before getting back the first. Second, TRULY representative pictures. Like you said, don't just post a picture of the best one. Maybe have pictures of ten blocks of medium quality. Third, price should be lower, but I haven't been doing this long enough to tell you how much.
I think selling in bundles would help, too. That way I would feel like I'm more likely to get a piece I like. Finally, I'm not familiar with Mexican kingwood, but the type of wood would determine whether or not I would buy sight unseen. I would NOT buy burl, especially dyed burl sight unseen. There's just WAY too much variation from piece to piece with that stuff. Some pieces (especially with the dyed stuff) can look cartoonish to me, while others look elegant. If it is a more regular or just figured wood, I think I'd be more willing to do it. Another consideration is the block size. Larger blocks allow flexibility as to which section of the block you use. That lets you use just part if only part is good.
I think selling in bundles would help, too. That way I would feel like I'm more likely to get a piece I like. Finally, I'm not familiar with Mexican kingwood, but the type of wood would determine whether or not I would buy sight unseen. I would NOT buy burl, especially dyed burl sight unseen. There's just WAY too much variation from piece to piece with that stuff. Some pieces (especially with the dyed stuff) can look cartoonish to me, while others look elegant. If it is a more regular or just figured wood, I think I'd be more willing to do it. Another consideration is the block size. Larger blocks allow flexibility as to which section of the block you use. That lets you use just part if only part is good.