Auto Bed Leveling, Z not compensating for unlevel bed

Hey,

I've just recently finished building my Smartrapcore (Wooden) and pretty much everything works except the auto bed leveling. I'm using Marlin 1.0.2-1.

Technically it woks (I've done prints), I mean after Z homes in the center, the probe goes to all 4 corners and probes and I see the probe's red light turning on and off as this happens. The problem is, the Z axis doesn't move at all to compensate and level the bed during the print.
One side of my first layer is completely squished down, very thin layer. While the other side is round and barely sticking to the bed! I used Tom's guide and tried to follow his advices pretty closesly.
My print bed is pretty solid and doesnt vibrate or wobble up and down and I'm pretty sure the glass bed I'm using is flat. Because I used it on my first printer until I got an aluminum bed for it, which was working well.
I use an inductive sensor with aluminum tape on the glass bed.

Here is my config file:
http://pastebin.com/u7L2N6GY

I've been fiddling with config file and my setup for a few days and I couldn't figure out the problem, so I'd appreciate some some help!

After you're doing G29, you aren't doing G28 right? That'd clear the auto level matrix that it just probed.

Nope. I do G28 then G29.

I haven't watched Tom's video for a while,but i seem to remember there was some calibration information missing.
In particular the offset and the height settings.

You mean Z offset? and probe's height? I think he did (around 9:15 he starts explaining). But one thing that I found was different for me was the height. He said the z offset should be less than 1 CM but mine is about 2.65 (-2.65 offset). My probe's is about 0.9mm off the bed surface when the nozzle is just touching the bed. (in center)