I'm being stupid. Yes we can block with Qd6.5, I hadn't noticed that. Going on a delete post frenzy!
No worries! You're not stupid. It's easy to miss that. I didn't even see we had ...Qd6.5 at first and I made a lot of miscalculations (that I didn't post yet so I just deleted that analysis before I could post it).
I thought the queen occupied all the square it's standing on? So on d6.5 the queen both occupies d6 and d7 and therefore the a3-f8 diagonal is blocked (by the queen on d6), so white can't play Qe7. See Martin's example 4 of "Occupying Multiple Squares event" where the bishop on c1 can't move to h6 because of the queen on fg3.5.