From what I understand it, the gap is from the horizontal bar joining the damper to the remote reservoir, to the top of the remote reservoir. There is a pic on here somewhere showing the difference.
Again, I'm no expert, and I haven't got round to checking mine yet, but the way I understand it, the remote reservoir contains about half of the oil and gas needed for the damper to operate. If the gas leaks from the system, the remote reservoir sags, and the two parts move closer together as there is no high pressure gas to keep them apart.
For those who have had a rebuild I believe it's possible to pump up the dampers if they have lost pressure. I think the pressure is 60psi. You can use a pump for mountain bike suspension.
Obviously if there is no pressure there is a problem that needs addressed but this might be useful for very small drops in pressure over time
Or take them down your local gas supplier and get them gassed back up with nitrogen for a few quid! Thought it was 65psi also!! Although I can't imagine 5psi making a huge amount of difference!