trekster, sounds like a well known problem with the '08 TST2 system.
The damping cartridge in the TST2 leg had a fault with the bottom cap on the damping cartridge that let oil from the fork leg work its way inside the damping cartridge. This overfills the damping cartridge and locks out the damper, leaving you with only 20mm or so travel.
If you are the original owner/have recipt etc then Windwave may be able to help you. If you're not the original owner (i.e. can't get warrantee) then you can strip the damping cartidge and refill with the correct level of oil. Just have to hope it doesn't happen to often.
Search on mtbr suspension forum for 'TST2 shim stack damping mod' There are several threads covering the damping conversion from TST2 to shim stack, and how to remedy the oil lockout problem. If you are capable of moderate technical work then you can do this yourself