First, thanks for all of the input regarding my Krag project.  It's been a learning experience and a hobby that's thoroughly enjoyed.  The following will hopefully summarize the "progress" made thus far.
1.  Purchased a project Krag with a welded bolt (bolt #1).  Firearm appeared functional except for bolt and missing fromt sight.
2.  Purchased complete bolt #2 for parts.  Bolt lug had a groove at rear base and I decided to forgo using it due to safety concerns.
3.  Purchased NOS bolt body (bolt #3) and thoroughly cleaned.
4.  Breech area cleaned extensively and no known burrs noted.
5.  Already own .303 button-style headspace gauge set.  GO gauge measures .0655" when SAAMI specs state .064".
6.  Stripped NOS bolt (bolt #3) will not close on GO gauge the majority of the time unless I am carefull about the gauge's orientation.  Bolt will only close if GO gauge cut is properly oriented for extractor cut in breech.  Assembled bolt will close on GO gauge if gauge is properly oriented for extractor.  All other times, the bolt comes within just a few degrees of closing.
7.  Using a properly sized brass casing, NOS bolt (bolt #3) will always close if using more than light finger pressure.  No scratches or rub marks are noted on casing after extraction.
8.  I have decided to order a Forster GO gauge which should be of better quality / better tolerance.
9.  Chamber cast will be completed to confirm proper caliber / chamber dimensions.
Hope this summary will help in the diagnosis.  Thanks again for the assistance.
- milsurpshooter