Anaphase,
Here's an interesting article about bike fitting, saddle/handlebar height in particular. Maybe there will be something there to help.
http://www.peterwhitecycles.com/fitting.htm
As to touching knees/legs to boobs while pedaling - well I tried today. Really tried. Got as low on the drops as I could, my chin was almost touching my bars, and still no contact. ::::::::sigh:::::::::
annie
Time is a companion that goes with us on a journey. It reminds us to cherish each moment, because it will never come again. What we leave behind is not as important as how we have lived." Captain Jean Luc Picard