I feel your pain.
I just went in to my local bike shop for a fit assessment based on the bike being set up like it is in the photos from my thread. Seat height was dead on, nearly perfect, and no adjustments were made there.
HOWEVER. We ended up lowering the stem to have only 10mm of spacers,
lengthenened it from 110mm to 120mm, and rotated the bars forward a bit so my wrist angle had more of a natural extension of my arm. The other thing we did was move the saddle up (fore) about 8mm.
What this has done is put me in a more classic road riding position and has stretched me out a bit. I'm not over extended at all, but I am riding lower, and less weight is being put on my shoulders and upper back. It has also allowed me to open the back up a bit and spread out the shoulder blades and even engage a set of muscles I wasn't using.
Like you, I thought I needed to go shorter shorter shorter on my stem, but in the end I believe that is what caused all of my upper back/neck pain. I'm going to put several hundred miles on this new posture and see if it makes a difference.
Bottom line, go get a fit assessment. It's worth the price, and can probably get you into a better position faster than you can find it here.