Singleshotjack,

Well, if nobody knowledgable wants to get in on this, I guess I'll bite.

The literature says that there should be a space or gap between the rear of the forend and the front of the action on a single shot rifle for best accuracy.  Where I have (or do) this, I try to make it like a well-done freefloat on a barrel; just enough to slide a piece of paper between (a dollar bill is handy, if I have one left from my latest adventures in single shots).  Sometimes this helps; often, it has no particular effect; I can't see that it has ever done any harm, accuracywise.

However, I really really hate to undo somebody else's good workmanship unnecessarily, and I find that although general statements can be made to cover the majority of single shot rifles encountered, the individual one you (or I) have tends to be a law unto itself.  If I had your rifle, I would develop the best loading I could, shoot it enough to get a good idea of the average accuracy, and then see if it shoots any closer with the forend off.  If there's a really noteworthy difference, then I'd start carefully shaving the back of the forend, trying to make the crack as invisible as possible.

Worrying about accuracy potential before a shot is fired and starting in with various fixes based on conventional wisdom will work with a benchrest bolt action, glued into a pillar-bedded plastic stock with a premium barrel chambered to a ten-thousandth of an inch, but there are factors working with our kind of rifles that work at cross-purposes and sometimes even cancel each other out.

In my own experience, I have a Low-wall that the forend is inletted very closely into both barrel and action that shoots very well.  I have a couple Stevens rifles that have the forend gap on some barrels and some contact on others when I screw them in , that shoot very well.  I have a High-wall, made up from parts, that didn't shoot worth sour apples until I glass-bedded in the barrel channel, the forend and the rear tangs to total contact with the metal.  Also fire-lapped the relined barrel, tried every load in sight and did a lot of screaming, cursing and other forms of spell-casting.  Somewhere in the course of all that effort, the gun straightened out.   (Wish I'd taken notes.) Not a lot of systematic guidance here, unfortunately, but, whatever works is what you have to do.

Hope this helps some.

Great information by all. I own a couple German singleshots, and both shoot wonderful once I figured out what they like. Both have forearm wood that touches everywhere, and it doesn't seem to matter. 
Both of my guns have much lighter weight barrels than my other US made singleshots, and I expected that to be more of a problem than the metal to wood contact, but the light barrels are no problem either.
Give it a try, and try a lot of loads and bullets, before you try to shave any wood.