Just bought a 2001 XK8 and the antenna only goes up about 8/10 inches and the stereo won't even scan to most of my local stations.
Question is, how far up should the antenna go when the stereo is on? is it hard or should I try to grab it and pull it up more or will that screw it up?

 

It should go up about 3 1/2 - 4 feet. Either the mast is stuck or the plastic ratchet inside is shredded.
As the mast start to move give it a pull to see if it will move.
There is replacements available and a 30 minute job to repair.

 

The mast rarely gets lubed/ cleaned. Try pulling as the radio powers on. If you get lucky and it goes up, you can verify it's not bent anywhere and you can straighten it out then spray with a silicone lube. On my car I disconnected the plug at the antenna because it went up every time the radio was on. I listen to my Pandora and my IPOD with 2 different FM signal receivers in the lighter socket. Because the antenna no longer goes up, my FM receiver gets a non interference signal all the time.

 

I heard that this might be to do with unit programming, not sure though.. Worth trying a hard reset along with antenna lubrication (WD40 not ideal but will do the job) before the other harder potential tasks like taking out the unit to see what's going on in there. Search youtube, two useful videos there, one on antenna replacement and another on motor unit dismantling.

Good luck