Can someone tell me if my components are compatible and/or faulty in some way?
the parts are all compatible but for some reason you are using a micro atx board in a full size case and in general a full size board has more features than a micro and you should be able to find a reasonable price/performance one too.
what id do if i was you is say what your budget is for this build and what you want to be able to do with the pc you will get some good advice on what parts to get that way
You won't get the full functionality of the 2500K on a H67 board, you'll need Z68.
For that budget I'd try something like this:
PCPartPicker part list / Price breakdown by merchant / Benchmarks
CPU: Intel Core i5-3570K 3.4GHz Quad-Core Processor ($229.99 @ Newegg)
CPU Cooler: Cooler Master Hyper 212 EVO 82.9 CFM Sleeve Bearing CPU Cooler ($29.99 @ Newegg)
Motherboard: ASRock Z77 Extreme4 ATX LGA1155 Motherboard ($132.86 @ Newegg)
Memory: Crucial Ballistix sport 8GB (2 x 4GB) DDR3-1600 Memory ($43.99 @ Newegg)
Hard Drive: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($101.98 @ Newegg)
Video Card: Sapphire Radeon HD 7850 2GB Video Card ($246.97 @ Newegg)
Case: Cooler Master HAF 912 ATX Mid Tower Case ($64.98 @ Newegg)
Power Supply: Corsair 650W ATX12V / EPS12V Power Supply ($79.99 @ Newegg)
Optical Drive: Lite-On iHAS124-04 DVD/CD Writer ($22.98 @ Newegg)
(Prices include shipping and discounts when available.)