Joe-

In your picture it appears that your chain is NOT routed through the rear derailleur, that is proper for the Sheldon/Shimano method to determine chain length. Also, the chain looks to be going around the biggest rear cog and the biggest front chainring- that is also correct for this method. Now, figure out how long the chain would need to be to be to be TIGHT in this position, then add 1 inch (two links/two pins) to the length. Break the chain there, thread the chain properly through the rear derailleur and the front derailleur cage and join the chain. Make sure that the place where you cut (break) the chain for length is the right inner or outer set of side plates to connect properly to the other end of the chain- if it is not, just add 1/2 inch (one link/one pin) to get the right combo.

Go back to Sheldon and Park to double check.

Hope this helps.