I heard someone collected stones to rebuild the Masjid. Why wasn't it built, and what happened to the materials?

You are correct. A devotee named Gopalrao Gund, who was the Revenue Circle Inspector, collected a large number of stones with the intention of rebuilding the dilapidated Masjid. However, as the narrative in Chapter 0 clarifies, Maharaj did not give him permission to proceed with that specific project. The work of rebuilding the Masjid was destined for another devotee. By Maharaj's command, the stones Gopalrao had gathered were repurposed to build the Shani temple and to renovate other temples within the village.