The derailleur is not "broke" (unless it's wallet is missing).
Seriously, just like every other modern derailleur that derailluer rests against a stop when the chain pulls it forward. There is not stop to keep it from moving back too far, as it will not do so on its own.
The chain is too long, even if you are in the small-small on a triple (though that gear should indeed be avoided). Go to Sheldon's or Park tool site and follow carefully the instructions on how to size a chain.
Those two sites are generally the first place you should go. Once you have thoroughly studied and followed correct procedures that relate to the item you are working on then you should come here. To do otherwise robs you of fully learning about how bike components and systems work and wastes time giving you information already available.
Last edited by cny-bikeman; 06-06-12 at 08:40 AM.