The overlap of the cable is a function of the winch drum alignment not being perpendicular to vertical path of the cable; In simpler terms, the companion way threshold/step is not molded level (this is so water will sheet away from the companion way and not into it), so when the winch is bolted to the underside the drum is kicked at an angle where the bottom of the drum is more forward than the top. The fix, and what might have been factory installed (or not), is a couple of thick washers under the forward edge of the winch frame but not around the 3/8 mounting bolts. The washers acts like a wedge under the front edge so as you tighten the mounting bolts the winch will hang level rather than matching the pitch of the companion way. This also keep the winch handle from hitting stuff at the top of its arc... I'll try to remember to snap some pics when I get home and add to this post.
FYI, my washers are pretty thick stainless 5/8 big 'uns, but in addition to those is a short length of stainless 1/8" thick x 1 inch wide stainless flat bar. My 'wedge' is about 1/4" overall thick. The result you want is that the face of the drum hangs parallel to the wire or as close as possible.