saksupple Having attempted an unsuccessful search on the web for a copy of the play I have found the following which supports your suggestion that it was an accepted spelling;
In 1818 'A Chip of the Old Block; or, the Village Festival; a Musical Farce, in two acts, by E. P. Knight, Comedian' was being published by C Chapple
Regarding the origin of the phrase 'a chip off the old block', originally the phrase was 'chip of the same stone' (first used in 1621) and this was shortly followed by 'chip of the old block'. This phrase appeared in John Milton's An apology against - A modest confutation of the animadversions upon the remonstrant against Smectymnuus, "How well dost thou now appeare to be a Chip of the old block." (courtesy of https://www.phrases.org.uk/meanings/chip-off-the-old-block.html)