Hello There,
Sounds like you've got much too much oil in the forks if you haven't got the travel. The Paoli adjustable forks used on the SY125/175F were the same as those used on the SY250s. I have always used the published oil capacities for that bike which are different in the left leg than the right. I'll find the correct quantities when back home and publish them.
Regarding the question regarding the clutch in another post: I've been using the standard plates for over 5 years. My 2005 SY125F had the standard hydraulic setup, but although beautifully soft, action was very on/off (it was impossible to slip the clutch in tight turns at low RPM). I bought a lengthened clutch arm (which was then offered by the Scorpa in a special parts catalogue), which improved matters enormously. The arm is only about 5mm longer than the original, it required cutting the old arm off the shaft and grinding/ maching the the shaft to accept the new clutch arm.
Great & reliable bike.Shame nobody built a similar 250 cc air-cooled version !