Hello Joe,
it sounds as though there is a problem at the clutch end. This system is designed to be self adjusting as the cylinder is quite a bit longer than the piston stroke which is determined by the volume of fluid the master cylinder delivers.
One common failure is that of the tapered bolt that secures the clutch release fork (inside the bell housing) to the actuating rod that is connected to the slave piston. If that has sheared the fork and rod will tend to rotate so that the slave piston will be further out of the bore of the cylinder. If you look at the angle between the slave cylinder push rod and the arm on the release arm, it should be greater than 90 degrees.
Also look at the way the cylinder and the mounting plate is assembled on the engine, could it have been miss assembled such that the cylinder is too far forward relative to the gearbox. Normally the piston should be far down in the cylinder at rest, (but not bottoming or the self adjust won't work) and as I said earlier the stroke is much less than the cylinder depth.
good luck,
Alec