John,
Sounds like you have one of the Italianicon walnut stocked rifles, GREAT find!
Any chance of a picture?
The Italian walnut was used because of a shortage of American black walnut in 3 s/n ranges form late 1899 to early 1901.

The late Bill Mook collected them. Here's some information he had posted in the past:

"I started collecting the "yellow Italian walnut" stocked Kragicon rifles in 1977. The problem I had in attempting to get a box of 10 was to get a three-way match of cartouche dates, serial numbers and rear sights by model and variation.

The first group of the rifles have stocks with 1899 and 1900 dated cartouches. They use the Model of 1898 sights. The serial numbers on my 6 fall between 234,502 and 268,788.

The second group have stocks with 1900 and 1901 dated cartouches. They use the Model of 1896, Variation 4 sights. The serial numbers on my 10 fall between 278,978 and 309,881.

The third group, which are those pictured, have stocks with 1901 dated cartouches. They have Model of 1901, Variation 1 rear sights. The serial numbers fall between 322,031 and 329,350.

Will try to get a good picture of them in the shipping box.
Bill Mook"

From Bill's information your rifle IS correct with the M1901 rear sight.

FWIW: I have 4 of the IT. walnut stocked Krags and always looking for more.

HTH
Chuck