Paper will not cut, I get the height error message. I have already emailed GF support and after a few days got fairly generic message about the crumb.tray.
“You can print on objects up to 2” thick by removing the crumb tray. However, your Glowforge can’t focus too far down, so you may need to put something laser-compatible underneath your material to lift it up. Raise it until the top surface of your material is between 1.5" and 2" high, measured from the metal plate on the bottom."
Is not the crumb tray at 1.5" already?
As you can see I am printing with the crumb tray inserted. I almost always get the error message when printing paper. The workaround is I put a small piece of cardboard on top of the paper and use that as the focus point. Anytime I cut paper I have this issue.
The actual gridded surface of the cutting tray generally falls at about 1.37" Just put a thin sheet of plywood under it to bring it up a little higher, and tape the edges of the paper to the plywood.
Paper is generally cut on a sticky mat of some kind (Seklema makes one) so it is raised slightly above the surface of the tray. If the camera is having trouble focusing, you can try raising it with a scrap piece of wood, or make a mat for it.