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If you can't get the action (which I assume from your description is too high) down to a usable height, you may need to shim the neck in the pocket--basically put a spacer between the body and the neck right down at the heel, to angle the neck back from the body. Here are a couple of references to check out:
This assumes that other factors that affect action are OK: the neck itself is straight (or very slightly concave), the nut and bridge heights are proper, etc. Have you checked the neck straightness with a good straight-edge?
DVM's Ever-Expanding Gear List:
Guitars - W-A-A-A-Y-Y too many to list. Check 'em all out HERE