BigDaddyCee said:
Personally I like it to start grabbing nearer the floor in the bottom half of the travel. Makes it easier to start out on steep hills, which makes for less riding of the clutch.
You are likely misadjusted, and are too loose, proper engagement should be around halfway up in the travel of the pedal. Engagement right off the floor will cause incomplete dis-engagement of the clutch which will result in premature clutch wear, difficulty putting into gears, excessive grinding of reverse, and eventually transmission damage.
To the original poster: I have done this setup way too many times. As already mentioned, you are not adjusted tightly enough. Regardless of if you pull on the cable with your finger and it feels tight, you will know when it is adjusted too loosely when the top of the clutch pedal feels all spongy.
The proper adjustment is to adjust ALL that spongy feeling out, except for about an inch or two. That point where it doesn't feel spongy any longer is the actual point of disengagement for the clutch. You want to tighten your cable until it is within an inch or two of that point. This WILL fix your problem (barring any internal transmission problems, which sound unlikely in your case)
Regardless of which adjustable setup you have, if your quadrant does not have at least 2 hooks, and you don't have a firewall adjuster, you wasted your money. (don't use the third hook though with the upr setup, the third hook is just for go-around patent reasons from steeda)
Like already mentioned, stick the oem non adjustable cable back in, get yourself a firewall and a double hook steeda or triple hook upr quadrant and put it in. This will give you the added adjustment that you need. Now adjust it as I mentioned and all will be well.