Small Engine Troubleshooting Problems? Ask a Mechanic Now.
I do have one question for you. Was the machine working okay with the original blades prior to installing the mulching kit?
I have only run into this issue on one other occasion at which point I ended up having to replace all tires with a slightly larger tire in order to get some extra height. This may be the only way that you can get the height where you would like it and keep the machine from scalping the ground.