Return Bulkhead so deep?

[smellsfishy]

you should have got a 2" diameter thin wall pipe to go into the top, this is what you adjust in length/height (don't glue it), remember you can't cut it back on, haha. take off a little at a time until you got it right.
btw it looks like you got way to much teflon tape on those threads, you only need 5-8 turns max imo, maybe it's just the pic??