Illustrator :: Defining Seemless Patterns In CS5

I am attempting to create a seemless pattern in illustrator cs5 with a logo a customer provided. I have looked through several tutorials and read most everything I can about the process but seem to be running into a strange problem. I make the pattern like all the lessons say with a rectangle with no fill or stroke set behind all the elements I want in my pattern. When I deifne the pattern it doesn't just include the objects inside the square but also the parts of the elements that leave the square. If I am understanding everything correctly thats not how its supposed to work. I am using illustrator cs5 on mac os x. Here is a screen shot. Back ground square really has no stroke or fill. I am only coloring it in so you can see the example.