On the assumption that you have all the air out and that the system is tight -
I think that the first thing to do is to find out if you have an adjustment for slack. If you have an eccentric bolt where the master attatches to the pedal, you may be able to adjust it and remove some of the slack. A quarter-inch is a lot. An adjustment would have the effect of moving the engagement higher in the travel.
If you have the non-adjustable version like Greg's, you may be stuck with the fact that you need to move a given volume of fluid to release the clutch. If the disk is worn and the springs in the pressure plate are taking up the slack, then more fluid hence longer pedal travel will be needed to release the clutch.
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe