Haven't used that brand of ammo, butt primer setback is often a sign of excess headspace in a gun.

Agree on headspace, but try different ammo.  Recent shortages hav brought sub standard into the U.S. simple switch may fix the problem.

Boats

Measure the setback.  That will give you an indication of what the head-space is.

Had a similar problem with a Cadet Martini Hornet. Dovetail bushed the firing pin slightly thicker and problem went away.
Chuck

Thanks to all who responded to my question.
Headspace was the first thing that I checked and the no-go gage of my set and a friends set won't allow the breach to close.
The primer protrusion is hard to measure but seems to range from .002" to .005".
All cartridges were PPU factory ammo.
Since the project was to convert a standard Martini to side lever function, I used what was available in putting the rifle together. The barrel is a take off Ruger 22 Hornet barrel and the firing pin was bushed and reduced in diameter to .070". Although the side lever has poor mechanical advantage compared to the original lever, there was no problem with extraction in preliminary testing using just a primer. I don't remember seeing any primer set back with just the primer but will retest this to be sure.
Two 5 shot groups were fired and the hang up on lowering the breach block occurred on about three occasions. It looked as if the primer was catching on the upper edge of the firing pin hole. The first two hang ups were cleared by pushing the breach block down by hand while the lever was lowered but one hang up required hitting the primer with a small punch.
A practical solution would be to rebarrel the rifle using a low pressure cartridge and I may do this anyway but I'm puzzled by the primer set back.
Otto 

Have you compared rim thickness to other brass

BN and LG. Thanks for your suggestions.
I rechecked whether a case with just the primer would push back and it didn't.
I checked the case dimensions against COW and a Hornady 22 Hornet and they are correct including the rim thickness (.062").
Finally, I fired a Hornady 22 Hornet (35 gr V-Max) and it too had a little primer push back (.002).
If the breach block face is perfectly flat, I'd expect the primer to remain flush with the rim, even if it was pushed back. Maybe, in filing the breach block face, after bushing the firing pin hole, I've somehow dished out the area around the firing pin hole.
Unless someone has another explanation, I'll stone the breach block face flat, when I change the barrel.
Otto