I'm 5'9 with 32" inseam, riding 54cm compact frame bike with 55cm effective top tube.
In two years I could not fit it right. Right now I'm already using 120mm stem, but it still fells like the handlebar should be at least 2cm farther. It seems that I should use a larger frame, but in that case standover height might be the limitation. Any suggestions?

I'm 5'11" with a 30" inseam and ride a 55 or 56, but it depends on your other measurements. Is your seat also set way back? If so, you probably need a bike with a longer top tube. That either means a larger frame, or a frame with a more "relaxed" geometry. I can't see why you'd have a stand over problem on a compact frame though.

I'm also 5'9" with a 31.5 cycling inseem. I prefer compact frames with 54-55cm TTs and 100-120mm stems. Your set up sounds about right but you can't really tell the whole story (body proportions, flexibility,etc...) with just your ht/inseem. Good luck.

Sometimes no matter what you do a frame just isn't going to fit you. I had a frame like that recently. I adjusted and adjusted and just couldn't get it right. I finally had to give up and go with another manufacturer. My brother has been dealing with the same thing with his Litespeed for close to two years now. He has had two professionaly fittings and still has back problems.

Your proportions sound about average. I'd guess that pushing your seat back would help. Peter White, Steve Hogg, Bontrager, etc are proponents of being well behind the knee-over-pedal-spindle fit "rule". Having your weight balanced on your butt is more efficient... and it is the way most of the euro pros ride.

If your seat is already back, then 130mm stems are readily available... plus some bars have more reach than others. A different bar width might help as well. What kind of symptoms do you experience that make you think more reach would help?

BTW, when you are normally riding on the hoods and you look down at the front hub, is it obscured by the bars?