Sounds like the preamp is working correctly all right. I'd keep a close eye on it for a few hours while the heavy transformer slowly comes up to full temperature, but if that goes without incident it looks like you're in good shape.
The first couple steps of the volume controls are very large - the details are in the manual for them. In the main Foreplay manual there are instructions for reducing the overall gain, so that the volume controls themselves can be set higher for the same level. That will get you to the range where the steps are less abrupt.
Most systems have too much gain, and it looks like yours is one of them. That's why this gain range adjustment is built into the Foreplay. On the Community page at the Bottlehead site there is a white paper on system voltage levels, if you want to study further - though I freely admit, it's a pretty dense paper and has more than anyone should have to know.
Post back after you have stress-teste the preamp and are comfortable with it, and we'll all congratulate you on sorting a hard problem. :^)
