PeterH, my advice on your setup is to check kingpin movement, BUT your rebound spring looks shortened based on counting coils. Your gap, if the car wheels are on the ground looks huge! Is there anything in the car’s history to hint at modifications?
I assume the photo is of the hub with the car on level ground. The hub should then be in a “neutral” setting for the rebound spring, i.e. just able to rotate by hand. Effectively no real compression, just a no gap location. This results in compression when the wheel drops on a rebound down ( hollow/depression/pothole/cornering pressure). This was the situation on both Morgans I have owned, a 1993 4/4 and the current 2002 Plus8. When jacked up the hub drops and the rebound spring compresses. On the Plus8 the coils are almost fully compressed. Maybe weakened and need replacing? Is there analternative same poundage with bigger coil gap? I’ve never considered cutting the rebound back as not necessary. I might try jacking the hub upwards to create mainspring compression and would expect a gap to appear above the rebound spring. My kingpins are free so no sticking. I am likely to replace the main springs with standard poundage ones ( debating bearing version with appropriately shortened spring but not the rebound!).