1) Is the cable already attached? If so, try loosening it. (never mind - saw that it's not attached yet)
2) Are you adjusting the correct limit screw?
3) Is the derailer actually hitting the limit screw? My guess is not. If it's not, check if it might be hung up on something by pivoting it backward and forward. Also try pulling the cage down as DannoXYZ suggests.
4) If it's not hung up on anything, can you move it out by hand? If so, the derailer may be dirty or sticky, or the spring may be defective.
Is this a brand new derailer or has it been used before?
Last edited by Gonzo Bob; 04-30-08 at 05:55 PM.