I believe that even though it's important that the belts are within specifications they can be made shorter if you have done a lot of resplicing, the problem will be that you can no longer make a full six foot bale without blowing more splices apart. I know that with no hydraulic pressure that the gate lowers to within your four inches of being closed so make sure that your tractor is producing enough pressure to lift the gate which should also be enough to pull it closed and lower the cylinders to lock it closed.
That density control is a tricky thing, too far one way and it makes a large difference. Similar to adjusting how much twine, an eighth of a turn can change to a lot more wraps.Going too far may reduce your pressure to the baler drastically and leave you with a limp cylinder. I always ran mine touching the red area which put good pressure on the springs and I guess left good pressure in the lift cylinders for the gate although I'm still not convinced the two are connected in a critical way.
