That saddle height is about right. The handlebar height is the part that's been giving me trouble. When the original handlebars were set to the "minimum" position, they were far too low. I pulled them waay up past this point, making them unsafe, so I thought I should get a new handlebar stem. I bought one that was longer, and here we are now.

Oddly enough, the handlebars seem okay at that height. When I look at it in a picture, it seems ridiculous, but when I was riding around the seafront I was fine.

I'm 5' 5 with a 29 inch inside leg. I have a fairly big top half, but stumpy legs. That explains a little why I need such a long stem (I do agree that it looks hilarious).

I'll leave it the way it is for the moment. I've messed around with it for too much today. I might have a go messing with it tomorrow, where i'll report back what i've found out.

EDIT: I might get some sandpaper and rub the inside of the frame. I'll get out as much rust as I can, and try again.