The best way to determine how short to cut is to lay on the ground, on the pad, and experiment with different lengths of the pad sticking out above your head. This way you can simulate various lengths until you find as short as possible without surpassing the level of discomfort you are willing to accept. Then, cross reference that this particular length meets your other needs (like folds into a dimension that works for the pack you are considering) and if all things seem compatible enough, then cut.
I am imagining this will be approximately the length between the top of your shoulders and the bottom of your buttocks (afterall, do you need it under your head if you are using a ball of clothes for a pillow?)
Hope this helps
Cheers
John