The problem us simple, some past owner has welded a bush into the bottom of the seat post tube so the pogo stick doesn't drop fully home. From what I can see there are two main options;
1) cut the bottom 4" or so off of the threaded rod and spring assembly, so that the end of the spring sits on top of the bush. Quick to do, shortens the spring travel though
2) fit one of those mini shocks under the t-bar, with one end fitted into the top of the seat post tube.
Both seem fairly straightforward, and with 5" tyres , glide forks and modern roads I don't see the ride quality as a problem. The "tractor saddle" riding position is retained and I don't really see any problems.
I was just curious why anyone should have made this inaccessible modification to the frame in the first place? I see no value in it at all, either technical or fir appearance. I've seen the TOP of the tube welded over for appearance sake before, but who looks underneath the bike?
Shoot, a man could have a good weekend in Dallas with all that stuff...