If the linkage is removed and the wagon will move up and down with the lever, then the sag in the back is not being transfered to the valve. The valve lever is actuated via the position of the rear sway bar, so I guess the sway bar links could have an issue, something could be amiss with the sway bar "arm" to the valve linkage, or the linkage simply isn't adjusted short enough. I guess also the lever coming off the valve could have been mis-adjusted on the shaft that comes out of the valve. This is usually not supposed to be touched.
Shortening the adjustable linkage raises the wagon.....

__________________
Jimmy L.
'05 Acura TL 6MT
2001 ML430 My Spare

Gone:
'95 E300 188K "Batmobile" Texas Unfriendly Black
'85 300TD 235K "The Wagon" Texas Friendly White
'80 240D 154K "China" Scar engine installed
'81 300TD 240K "Smash"
'80 240D 230K "The Squash"
'81 240D 293K"Scar" Rear ended harder than Elton John