You are right that the M1 do add up to the original 68 sts to make 77 sts total. I guess what I'm trying to say is the k7 stitches don't make sense.
K7, m1= 7 sts, plus 1 sts
(k7, m1) 8 times = 56 sts plus 8 sts
K6 = 6 sts
So, don't you need 69 original sts to complete this pattern?