If gravitational potential energy change is in the approximation form,
$$\Delta U = mg\Delta x,$$
($x$ has a coordinate direction which is positive opposite to but parallel to the gravitational field), the zero reference is arbitrary. The zero reference for the spring is not arbitrary.
This means that simply equating the $\Delta U$ for the spring and $\Delta U$ for gravitational force is not a valid approach to this problem. On the other hand one might use conservation of mechanical energy in the special case of no external force doing work:
$$K+\Delta U_{spring}+\Delta U_{g} = E$$
$$E_2-E_1=W_{ext}=0,$$
where the subscripts $1$ and $2$ designate two different locations along the path of motion.
It seems that what you have done is to set the zero points for both potential energies at the same vertical location. That's okay, but you have to remember that along the path, the kinetic energy will not necessarily be zero. If you release the mass at the unstretched spring position with no kinetic energy, the mass will move until the kinetic energy is again zero, but that is not at equilibrium position. In fact, the equilibrium position is half of that total distance. That's what your answer is telling you.
When the mass reaches the equilibrium position is has kinetic energy (it's moving), but the net force is zero so there is no acceleration to stop it at that position.
The equilibrium position can be found by finding the position of minimum total potential energy, or in this case, finding the maximum kinetic energy position.