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Shopping for new droppers I measured the max insertion depth on my bike (spesh enduro 2015 29 xl comp)
It maxes out at 237mm which is a long way above where the upper linkage bolt enters the tube. Alas there seems to be a small (under 1mm) lip on the forward side of the tube, just below where the top tube joins, preventing any deeper insertion.
Is this a bug or a feature?
Is there any easy way to drill or "retap" it to get longer post insertion?
My old specialized had something similar. It was a split seat tube with an open bottom so it was a safety feature to stop the post being inserted too far and interfering with the shock when the suspension moved. It was very conservative so I filed it off and was just careful when lowering the post to set it just right. Not sure if yours is for that or just a bit of excess weld but it might be something like that
It would take more than filing unfortunately, the lip seems to only have one side to it so you'd need to widen the entire tube below that point 🙁
Is this a bug or a feature?
Both.
You need to either buy a seatpost that will fit your bike or buy a different bike. If you try to ream it out, you'll most likely trash the frame and need to buy a new bike anyway, so just buy a new one and sell the old one if you can't live with it.
Is it meant to have a shim in the seat tube?
The original seat post was spec’d at 30.9.
If the top of the seat tube was 31.6 shimmed to 30.9 then everything would make sense.
But without seeing the frame this is just speculation.
I think you are stuck with what you have, we had the same frame but in carbon. It was made for a 30.9 seat post and couldn't get anything longer than the 125mm Command post it came with in it. They changed the dia on the carbon ones in 2017 to 34.9 and it came with a shim to 30.9 which allowed a longer 30.9 dropper to be fitted. We could get a 170mm Brand X dropper in.
Always have the option to shim down to 27.2 but fewer droppers then.