Bicycle Mechanics - Steerer's Tube Too Short

Long story short I miscalculated and cut the steerer's tube too short by around 5mm (There's around 8mm of space from the steerer's tube to the top of the stem). I currently have a 40mm height stem.. (it's 1-1/8" with a shim to convert it to 1", if that matters any) and the top bolt isn't really clamping onto the steerer's tube at all.. will a 35~mm height stem rectify my issues? and if so, does anyone have any recommendations on a 35mm stack height stem? FSA lists a lot of stems at 35mm but people say they're actually 40mm a lot of the time... or is the only solution a new fork...

A few mm gap is ok but 8 is definitely pushing it. If you can find a true 35mm stem you'll be good but otherwise, you're looking at a new fork.

A few mm gap is ok but 8 is definitely pushing it. If you can find a true 35mm stem you'll be good but otherwise, you're looking at a new fork.

So less than 5mm of space will be okay right? And I really need recommendations on a true 35mm stem... if anyone could help me out with that. Thanks...
And most of the stems I find are 31.8mm but my bar is 26mm.. Is the 26 to 31.8mm shim a good idea?

Check around at various bike shops for a short stack height stem but, as andrewluke said, 8 mm is too much particularly if the top bolt of the stem isn't fully supported by the steerer. This is bad with a steel steerer and absolutely dangerous if the steerer is carbon.

I assume there are no spacers under the stem to remove, correct?

Edit: I just checked the FSA OS 150 stem on one of my bikes and it does measure a true 35mm stack height but FSA lists the current version at 40 mm.

BTW, plan to buy a set of new bars too. Shimming from 26 to 31.8 is really too much.

-sigh- seems like at this point buying a new fork is cheaper than stem/handlebars........ Thanks

well if you have shims below, you can always remove them and deal with the added drop. My rule is similar to what HillRider said in that the top bolt needs to be completely below the edge of the steerer on a steel/alloy steerer. On carbon, I would definitely have a little bit of it above the stem and use a tiny spacer on top.

Shims aren't a big deal, they grip just as well. However, before you buy a new fork, look at some different stems. My old MTB stem didn't clamp as much of the steer tube as my new stem does. Granted, maybe it was bad design, and should have grabbed more ;).