Any question answered...

My bike has had the steerer tube extended at some point, it only allows for around 6-7cm of quill stem insertion before it hits a metal sleeve inside the steerer (I assume to strengthen the join between old and extended steerer?)

I can only fit a stem in fully if I cut the bottom of the quill stem off.

1. is this a safe amount of stem insertion and is chopping the stem dangerous?
   
2. normally the stem bolt isn't threaded high enough to tighten the short stem. this has left me stuck with a crappy old scrap yard stem. I want to replace it.
   
   

Are there any ways around this?