It isn't clear from what you said about the directions, but make sure you aren't pouring that 1.5 gallons you just boiled into the carboy first and then adding the cold water on top. Your carboy will not be happy with that kind of thermal shock and it can crack and/or break; however, if you were using something like a plastic bucket you'd be ok.
I also would not want to boil only 1.5 gallons. After you pull your steeping grains out, you'll be left with something closer to 1.25 gallons, and if you boil that for an hour you won't have much liquid left.
There is something magic about the 1.5 gallons you are steeping in (it keeps your water chemistry in a range where you are not likely to extract undesirable flavors from the grain). Once you're done steeping the grains I would take duboman's suggestion for boiling, or boil as much as you can comfortably fit in whatever pot you are using. The downside to boiling a lot of liquid at once is that if you don't have some sort of chiller, it takes a lot longer to get the liquid down to the proper pitching temperature.