Cut the air pressure back to around 55 psi and approx 40 amps,,,too much air is not always good,,,move very very slow and steady like a machine,,,watch for a rooster tail of sparks coming from the cut,,,try and keep that spark pattern steady,,,moving too fast will snuff the cut action and make it incomplete as shown in your photo's,,,the pilot arc you describe is as it should be...the cutting will take place when that stream touches the metal attached to the ground/earth clamp..

Getting a splash back is a sign that you are moving too fast for the cutting action...move slow and steady use a piece of angle iron for a guide until you get the hang of it..on 11 guage you could probably get away with out the stand off,,,just using a drag..