[SOLVED] Excerpts have huge amounts of space between them. V.3.2 and WP 2.8

I am trying to fit a clients psd design into this theme at http://www.wpthemerz.com/themetesting

and as you can see the front page is set to show excerpts but there is a huge space between them. They should also scroll instead of breaking the page layout, everything is fine and scrolls if I use full post instead of excerpts but that is not what the client wants because we are trying to avoid as much scrolling as possible.

I have already triple checked all of my settings in post/page styling and it is fine. I have 0 0 0 0 set for margins.

any help would be appreciated.