you could mount an ultrasound transmitter on the table and a receiver on the base and compare the difference in time between a sound pulse and an electric one. you might have problems with the sound passing through the table as well as through the air but it sounds feasible.
there's definitely a sharp IR sensor that works at this sort of range too. it would be easier to implement than ultrasound i think.
so it's essentially the same problem as a printer carrage except you don't want it to go to it's home position when you power on right?
a lot of printers use a linear encoder. basically a series of black marks on a white background. the printer counts how many marks it has gone past to determine it's position.
this wouldn't work for you without a little modification as you want to know where you are at power up without going to the start (or bottom) position.
one method of making this work would be to use a microcontroller with some eprom memory so it remembers it's position from last time.
i'm presuming you are using some sort of microcontroller to track the tables position?
a simpler method would be to use multiple linear encoders.
the first would be divided into 2 sections, half light and half dark.
the next would be divided into 4 sections, 2 light, 2 dark.
you would need 5 of these strips to get accuracy of 1".
with 8 you would get accuracy of 0.1"
if you made the linear encoders out of a transparent material and just mask out the dark sections you would be able to use small U shaped photoelectric sensors like these: http://pewa.panasonic.com/acsd/sunx/products/pm.php
one for each encoder to read the position.
i think you could build something less than 2" wide and the same length as your air cylinder that would give you reliable results.
that's how i'd do it anyway.
let us know how you get on!