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The 1st picture looks like the reciever is cracked on top.
The pictures clearly show the poor quality of craftsmanship.
I have built 2 from GI parts and restored several and never had a problem.

If it said .35 Remington on the case you are shooting the incorrect ammo. You should be shooting 8mm. They are not one of the same. I would think you can do some real damage to the gun or yourself.

That's a very nice rifle and nice job. Did you re-tap the original threads?