You know what.  I have bought around ten krags in varying degrees of condition and except for three that I have never fired I have never checked head space.  The Krags headspace on the rim and not the shoulder as you know.  The rim is surrounded by the bolt and the bolt crown.  Your rifle looks sound.  I would check for a cracked lug and if there are none to be found would put a round in it and fire one down range.  Then I would check the spent case for problems.

But that is me.  I could be way off base on my opinion.  Smarter guys should be along in a day or so.

My very first Krag had a modified/damaged bolt crown which led me to drop a .30-06 round into the chamber.  It dropped in with no problem.  It should have not chambered and stuck out about a half inch if it was a .30-40 chamber.  Some veterans group modified the gun to shoot blanks in the distant past.

By the way, welcome to the Forum.  Glad to have ya' on board.

Good shooting,