Trouble with height of menu bar

Hi

I am back with a small problem that I cannot figure out. I want to reduce the height of a menu bar. The menu is a list with a 24x300px background image to indicate the active page. The padding is 1px top and 5px bottom to align the motif of the background image to the menu text.

What is determining the menu height? I want to reduce it right down, realising that the background image may have to do with it.

If it is the image, is there anything I can do to reduce its height and/or alignment to achieve a slimmer menu bar? The idea is taken from a Listamatic menu:http://css.maxdesign.com.au/listamatic/horizontal07.htm

My website is: http://www.muddycreekcutting.co.nz/
The CSS is here: http://www.muddycreekcutting.co.nz/css/mcc.css

I look forward to your usual helpful suggestions!

Best

Anne