It looks like you're inserting the SCLogin module into the menu using Modules Anywhere. This is fine, but that module is inserting anchor tags into the page, which you're not accounting for with your styles.
For example, with the login button, I was tinkering around with Developer Tools and the following will get you closer to what you want:
li.item1497 a.item {
height: 10px !important;
}
I attempted to make an account on your page to get a rough idea of the CSS change needed for the logout button, but am waiting for approval. My guess is that it will be something similar to the above.
-Melissa