Have you checked it with a field gauge. I hear a lot of regulars here that say that a Krag is safe even if a no/go gauge is accepted. If you have any dial indicators you can check how much play is still in the bolt with the no/go installed. Not sure how many thousanths of an inch a field gauge is larger than a no/go gauge. A good gunsmith could set a barrel back one turn and line up the sight again. Not every gunsmith is that good.
Some of the regulars here use the CMP to do barrel work, they can tell you how to do that.
Not a gunsmith myself and certainly would not try to do it on a part time basis with the new federal interpretations of ITAR.

'fhrzr1' - Welcome to the KCA Forum.

Please excuse our questioning, but, "head-space" is often over-blown in regard to Krags.

Also, knowledgeable Gunsmiths, especially in regard to the Krag rifle, are a disappearing breed.

It is only fair to ask, what has lead you to conclude that your Krag has excessive "head-space"?

As indicated by 'psteinmayer', .30-40 Krag head-space is the rim thickness, plus, an amount of free-play or clearance.

Lots of safe Krags will close on the commonly available 'No-Go' Gauges. A better test is the use of a 'Field' Gauge measuring .073" (the thickness of the gauge rim).

When trying the gauge in the Krag action, it is important the you remove the striker/extractor parts and just use the bare bolt-body. Do not use any force in trying to close the bolt on the 'chambered' gauge. Just use light finger pressure.

(Attached are pictures of my 'Field' Gauge and of a Krag action with the gauge in the chamber).

If a Krag bolt closes on a 'Field' Gauge, it is likely someone lapped the 'locking-lug' so the rear of the bolt 'guide-rib' would make contact with the receiver wall, when the bolt is closed, (a once common, but, generally unwise practice). There should be a few thousandths clearance between the rib and receiver, (see 3rd photo). The fix for this problem is to buy a $55, New Old Stock, bolt from 'Movieman' on ebay.

(Caution - Occasionally, one may encounter a Krag rifle that some VFW Post may have had the chamber altered for .30-06 'Blanks' or to 'de-activate' the weapon. Nothing will fix this, but, re-barreling).