Here is a picture I did (please forgive the quality, I had to do it in paint LOL) of how I set up my mechanicals when I did it. The retract servo has to turn 180 degrees. as a result, the arms must start off just a little opposite of each other so they can come together when turned, most of the mechanicals I've had, were in the retracted position when the servo had the arms apart from each other (top of picture) and together when the were the gear was down.

Are you using an actual 180 degree retract servo? A standard servo probably won't work for you, and it won't have the power needed, if you're using a standard servo, it might just be stalling and that is why the gear won't come all the way up, when you retract them, do they come up all the way if you push on them?
From the sounds of it, you're only getting 90 or 100 degrees of movement on your servo, when you will need 180.