I've never heard of mixing your own thermal compound before. Sounds like paste of the lowest possible quality to me. Ditch it and buy a tube of the good stuff. Arctic Silver is a few dollars for a tube, and has great performance. You could pay a bit more and get nonconductive paste as well, which will save your board if you accidentally get some on it.
+1 The powdered stuff can't be very high quality, unless it's diamond dust, which I VERY highly doubt.