Steering column

Huh. Never seen hat before. You gotta blow through several road blocks and be really intent on doing things half-assed to end up at that point. It's almost laughable.

Take the whole thing out, you'll never figure out what happened with it still in the car. Take it apart and see what is going on with it. Like I said already, you likely have a collapsed shaft, mismatched parts and/or an incorrect install. Probably all three.

The steering shaft should not be way down like that because if it was installed correctly with the lock collar and upper bearing snap ring, there is no physical way it could have dropped down into the jacket like that. It's probably collapsed and missing the lock collar roll pin and snap ring, which is also probably why the collars were loose. The lock collar and snap ring are what keep the collars in place and tight.

This is the lock collar I am talking about. See how the roll pin goes through the collar and the shaft? If that pin was actually in and holding the collar to the shaft, there would be no way it could fall down into the jacket.
http://i273.photobucket.com/albums/jj214/rmchrgr/IMG_9570800x600_zps36c07bf4.jpg

Here is the snap ring that retains the upper bearing. The snap ring rests in the groove.
http://i273.photobucket.com/albums/jj214/rmchrgr/IMG_9579800x600_zpscb285cf7.jpg

Make sense?