There are a couple of different CSS styles that are adding padding:
1. In sc_bootstrap.css around 638, there is a margin placed on ".sourcecoast form" elements. You can add something more specific for SCLogin, such as:
.sclogin-joomla-login form {
margin: 0px;
}
2. Your template adds a margin to ul elements (in style-purple-tone.css for "ul, ol" elements) You can add something more specific for SCLogin like the following:
.sclogin-joomla-login ul{
margin: 0 0 0 25px;
}
3. The last margin I see coming from your template (in joomla25-purple-tone-extended.css for ".moduletable, .module" block) is putting 20px between each module, but I think it'd be better to keep this here.
-Melissa