Okay guys, a quick update.
Yesterday I rebuilt the forks; tore them down, changed the oil, recharged the oil in the cartridges, changed to the +10 springs, set the oil height and stared at the preload spacer for about an hour trying to decide whether I should cut it or not. I decided to bolt it back together.
It works! A full, glorious 7 inches of travel! Holy cow I didn't know what I was missing. I'm able to ride down hills and ledges and over rocks and things now without slamming metal on metal and cracking my wrists.
The springs ARE a bit stiff, so I may end up pulling the spacers and trimming a 1/4 inch or so, or I may swap one of the stock springs in to get the spring rate in the middle. It actually feels perfect for the type of training/play riding I do, but it might not be dropping far enough in the stroke to get the traction I need for slow slippery trials comp stuff. I'm getting about 1.5" of sag, which I think is a little short.
NO complaints though, all in all I'm extremely happy to have working suspension! THanks all for your help.
"If you don't like my riding, get the hell off the sidewalk"