how much set is acceptable?

[Badger]

  Not all set is the same either. Assume you are starting with a natural straight board. Some bows can take 2" of set and still have pretty good early draw weight while another bow may feel mushy. All you can really do is work the bow to full draw weight and read the signs the bow is telling you as you progress. If it starts taking set early in the process the wood is either wet or you are asking too much. If the set is only in certain places then the tiller is not even. If you only have a litte set right near the handle it can translate to 4" at the tips.

   Tim Baker mantra: Wide enough near the handle to take no set, wide enough mid limb to take little set. ( something like that)

[Jesse]

You got some great advice. Pappy had a good point that all bows take some set  and Badger is right about letting set be your teacher. Just looks worse when you start from flat. Im so used to seeing bows that start with reflex. I start with plenty of reflex so if I get string follow I throw it out. I know some bows shoot great with a little string follow and most older bows we see have string follow. Sounds like you found a new hobby and I hope you stick with it. They just keep getting better the more you learn and make.

[Marc St Louis]

Not only is the bow too short for the draw length, the draw weight is not really relevant, but your handle is way too long.  Keeping the handle as short as possible allows for longer working limbs.

[Bogaman]

Looks like you've gotten a lot of good advice. The first thing that popped out to me was the long handle.
Just follow the advice you get on here and you'll be making good shooters before you know it.