You use the same setup I use on all my phi-1 and phi-2 shields (same source too), literally hundreds of them spread across the world. No reason it won't run unless you made some mistakes. First, make sure you have very short wires. Then make sure you did the pull-up correctly. Actual setup pictures are way better than your picture-perfect diagram. It is totally correct but whether you followed the diagram is up for debate. You can only end the debate by providing actual pictures. Is that clear enough?
Correct connections won't produce this:
I only have one 4.7k ohm resistor, so I had both SDA and SCL going through that to the voltage, but then that turned the entire system off, outputting nothing to the serial monitor.
The following is not going to affect the output:
One other thing I should note is I have SQW/OUT wired to nothing.