Gravity issue

I am just getting into home brewing and I brewed a batch 2 weeks I ago on Sunday, 4/22. My OG reading was 1.040 on brew day. I waited 5 days and took a second batch of gravity readings and came up with 1.032 for 3 straight days. however, the foam layer was still fairly noticeable and I still had some intermittant CO2 bubbling going on, about every 1-2 minutes. I was told by a brewer freind that I should continue to wait until the foam layer broke down before getting ready to bottle.
The foam layer has since broken down and I took a gravity reading yesterday, 5/3, and my gravity now is at 1.029. I am thinking that my OG reading may have been off. I may not have had enough brew in the hydrometer cylinder and got a low reading because I can't figure out why there isn't a wider margin between the OG and subsequent gravity readings. However, after tasting the beer from the cylinder it tastes as though it has a relatively high alcohol content.

Any thoughts and how much longer should I wait before bottling?

What was the recipe? Was this a kit? If it's an extract kit, what was the advertised OG? If your OG really was 1.040, then something went wrong with your yeast. What was the yeast, how much did you pitch? Diagnosis is hard, much info needed.

Recipe for Amber Ale:

8lbs Light Malt Extract (OG not known)
1.25 lbs Crystal malt 120L
8oz munich malt
4oz chocolate malt
2oz columbus hops
Wyeast 1028 London Ale yeast - 1 package
2tsp gypsum
1 tsp irish moss

Pitched wyeast into starter of 1/4 cup DME and 1 cup water day before brew day.

If by "light malt extract" you mean liquid, then your OG was up around 1.060. If dry malt extract (DME), then closer to 1.070. Assuming a 5 gallon batch.

It was a liquid extract but no gravity information was provided.

As an FYI - I repitched my brew with Lallemand Nottingham yeast to see if I could bring down the gravity levels. After 2 and a half days no krausen of any other activity. I racked the beer into a secondary and will bottle in the next couple of days.

My gravity reading when transferring into the secondary was 1.030

1.029 is really high to finish with that recipe. I've had trouble with extract sticking around1.020 but never that high. Since it looks like your actual OG was around 1.060, my guess is that you under pitched and possibly under aerated. Do you make a starter for your yeast, one pack with no starter into a 1.060 wort is really low. Also, I find that over 1.060, good aeration is even more important and like to use an air stone. How did you aerate? I'm guessing shake method which sometimes can be hard to get enough dissolved oxygen I to solution with a high gravity wort.

I would pitch some rehydrated dry yeast and try to knock your gravity down some more.

Good luck.