RE: Rest hitting shelf
Are the prongs actually hitting the shelf keeping it from going all the way down? It does look pretty close to me. I would suggest moving the rest back some if you can. You could probably go 1/2 to 1 inch farther back and still have a pretty forgiving set up. Providing the rest will let you mount it that way. On most rests you can mess with the angle of the prongs to get the fletching clearance you need.
Try and set it up so the shaft runs thru the middle of the mounting hole for the rest, or maybe a bit a higher if you have to. Then set the nocking point a little higher than that. From the way it looks now you are nock low. I know you said you were just messing with it though. If you were shooting it like that it will force the arrow down into the prongs on the way out slamming it down into the shelf. I slightly high nock setting will help it clear the prongs easier.
Also pay attention to the spring tension. It should be just enough to hold the arrow up at full draw.
I would actually suggest getting a slightly better prong rest that is easier to adjust. The rest you have should work, they are just a pain to fiddle with. A better rest like a GFK will let you adjust the angle of the prongs and rest height easier.
I'm not familiar with the drop a way you talking about so I cannot help you out there.
Maybe this week I will throw a TM hunter on my darton and show you what I am talking about. If your rest will not let you move it back any farther and have the correct angle for fletch clearance you have two options. Get a diffrent rest or possibly shoot feathers. However if you are shooting the bow with that nock position and a stiff spring it is going to cause all kinds of problems. The rest will actually throw the arrow up as it comes out of the bow.
Also when using a loop like that pay attention to where the arrow is nocked before you draw. I would put it so the nock rests against the top knot of your loop. However you do it, it should be consistant from shot to shot.
Good luck. If you don't get what I'm saying let me know I will try and explain it differently or post some pictures for you.
Paul