Yellowhouse;
I have 5 Swede RB's, and shoot them all, so perhaps I can shed some light here, although you might go here first:
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as this is the most imformative and concise information that I have found on these rifles.
I have two M67-89's, all original and matching, both Carl Gustoff. They are amoung the most lovely military rifles from that era, and are equally frustrating to shoot. Chambered for 8x58 RD, which had similar performance to the .318 8x57 (i.e. 230 grain jacketed bullet around 1900 fps,) the bores tend to be a bit rough and somewhat oversized. These rifles were essentially new rifles built in the Swede armories from rehardened M1867 actions with new breechblocks, hammers and rotary extractors. I also have a 45-70 that I built on one of these actions. This was a bare action, with matching hammer and breech, that I got from Ken Busch.
I also have two M69's, 12.17x44R. Both are old 19th century Swede Sporters, converted to centerfire. The first retains most of its military characteristics and was very well done. This is on a Remington action, which I won't drill for a tang sight, but I hunt often with it using open sights, and it is quite accurate. The second was done a bit ham handedly, although it has a pristine bore. It has taken quite a bit of work to get it where I could live with it, including cleaning up a marred chamber by reamng to 50-70. I finally shot it last week and it grouped very well at 80 yards with BP and the Lyman 515141.
As for loading the 12.17x44, it is a rewarding cartridge to load and shoot. Pleasant, accurate, and a terrific hunting round. I am quite comfortable hunting with it out to 100 yards. It, also, is not expensive. Cases can be made from 348Win, and can be had from Buffalo Arms, or blown out ones self, and basic 50-70 dies are all that is requited for loading.
I guess my 2 cents is that if you have a good M1867 in 12.17x44 shoot it as is, or sell it and buy a 67-89 action. The improved 67-89 is really a peachy action for building a RB. As for the quality of the Swede rifles, it doesn't get much better. Remember the Swedes have a long, long tradition of being master metal and gunsmiths.
Paul-F,
FWIW I beat my head in the sand for 6 months when I got my M67 shooting smokeless and cast, with results similar to yours, 4 inches or so with open sights. When I switched to BlackPowder my groups shrank considerably.
MM