...the pallet is what changes the color by the way not the block type.
I can see where that might have been confusing, so I'll elaborate on what jkl said.
When you pick up a bush off the ground, what really happens is that the bush tile is removed, and a "green bush" sprite is placed in Link's hands. The "palette" value does control the color of the bush when it's a 16x16 tile on the ground, you're absolutely right about that. But the "blocktype" value controls what kind of sprite you pick up when you press the A button next to a bush.
If you don't have the bush set to the correct blocktype, you could actually be picking up a rock sprite, or a brown bush sprite, or you might not be able to pick anything up at all. The "blocktype" value *does* control what kind of sprite you pick up, and you have to have it set to type 80 for him to pick up a green bush sprite. Like jkl said, type 81 will give you a brown bush sprite, and type 82 will give you a light rock sprite.