Sounds like you know what you're doing - ----
Someone gave you this mower? Sometimes someone will change parts on the mower or damage something and the cut height will change...
Somethings to look out for :
1) If the blade or blades are installed upside down, the lifting fin of the blade that creates the vaccum will hang down ( about 1 or 1 1/5 inches)... This will cause the mower to cut that much lower ( and badly bruise/ rip the grass blades)
2) A blade could be bent, causing it to cut much lower than it should....
3) The wrong blade is installed, too much "drop" from the center of the blade may cause this problem..
4) The Cutting Deck could be attached wrong to some of the lifting mechanism, The lawn will only show the lowest place the deck assembly is cutting...(put the mower on concrete and see if the deck is even all distance around from the ground)
5) Are the tires the right size? one inch smaller tires will cut the lawn about 1/2 inch shorter...
6) sometimes there is multiple holes to lock the deck into on to the lift arms, are all the arms in the same adjustment hole? can it be adjusted farther up?
Here is a link to the owners manual if you need it...
http://www.managemylife.com/mmh/owner_manuals/25959/CRAFTSMAN-Lawn,-Tractor-L0807097?brand_name_search=917252451+CRAFTSMAN
Good Luck,
Friiy