icloud photo library, yet storage almost full

iPhone 6, latest iOS. I recently went all in with icloud photo. I pumped over 20,000 photos and videos into the cloud. But it seems that I the automatic allocation of storage space is not getting it quite right. I am talking about space on my phone, not cloud. This morning my phone is warning me "storage almost full". But, photos is using 3.5Gb of space. Seems if my phone is sop low on storage (155Mb currently), instead of prompting me to manage the situation it should free some space by purging old media.

This is a big problem. The other day I was trying to take a video and it refused, stating that I was out of storage space. In the past I used to manually pull all the photos and videos from my phone and put them in my iPhoto library on my Mac. Now I can't do that. So, but purchasing 500Gb cloud storage and moving 20,000 photos into that space, I kind of screwed myself. My wife is going through the same thing. I decided to move us into the cloud to eliminate the headache associated with having to manually manage storage due to photo and video consuming lots of space. Now, because iCloud Photo doesn't manage it correctly I need to manage it manually. Only problem, I can't. This make s my phone nearly useless.

Anybody else going through this? Is there a solution? One coming? Can it really be this broken? Even my Mac is struggling with this problem. I should be able to limit the size of the local library at the very least.

Paul