I was able to borrow a longer seat post from a friend and it made a big difference. I am now able to put my heal on the pedal and fully extend my leg, so no more cramped feeling with my legs.
The seat is now just an inch below the top of the handlebars. I feel like I'm leaning a little too forward, but that just may be because my seat is about 4" below the handlebars on my 26er.
I've tried to research proper bike fit and setup, but alot of it seems to be personal preference. Any help would be greatly appreciated.
LesterofPuppets - how are you measuring reach? I measured it from the center of the bottom bracket to the center of the head tube and got 40 cm.