Your Krag may have been rusted bad or exposed to some chemicals and been painted black at some point and had the paint stripped off with a chemical stripper of some sort. There seems to be a lot of paint remains around the numbers (look around the serial numbers), on the trigger guard and elsewhere. That's maybe why the metal has been stripped of any original finish. It looks beat up in some way. Really want to know what happened to it many years ago! We may never know. I have seen much worse.

The stock does look like it has had some varnish added at some point.

I suspect the bore is pretty bad also. Interested to know. I'd also like to see what the barrel and receiver looks like under the stock where the metal would be protected from outside rust or chemical damage. If you can, carefully remove the stock and take some pictures. You can leave the hand guard in place so you don't damage it more. It takes a special approach to remove this. You have to remove the stock first, remove the barrel band in front of the rear sight, remove the sight and slowly slide the hand guard forward to the front of the barrel and remove it then from the barrel. Don't pop it off because the strong spring clips can crack the wood.

If you do this, take more pictures and post them. There's often lots of good information under the stock and hand guard.

You've got a great piece that hides a fantastic history. Thanks for sharing it with us. For $500, you did great. I've gambled on auctions before and have sometimes gotten treasures like yours.