The chain moves up about a half an inch when I pull up from the center between the two sprockets.

Retem: Haha, you're actually really helpful, thank you. I can actually see part of the BB sticking out of the frame, maybe about 1/32"...eh more like 1/16", actually.

I hope you guys don't mind iphone pics, they're uploading right now..hold up a sec for them.

Oh, and The guy at the LBS was saying something about tight and loose spots in the chain, I don't really know what they are though..