Upon further review, photographs of some model 1896 carbines appear to have a thicker screw-head on their front (rear-sight base) mounting-screw.
Also note, Brophy, (on page 111) in "The Krag Rifle", appears to have incorrectly labeled the front and rear screws (for the m-1892 & m-1896 rear-sight base). From my experience and observation, the front base-screw has to be the longer one and the rear screw is the short one.
(IIRC - Several authorities have noted that it is possible and likely some rear-sight screws were 'mixed-up' over the years. There are some combinations that work with m-1892, m-1896, m-1898, and model-1902 sights. In the course of repair and rebuilding, if a screw could work, a mix-up may have occurred).
Today, I took m-1892, m-1896 carbine, and model 1896 rifle sights and placed a 'thick' head Krag sight-screw in the front base hole. I ran the elevation slide to the forward position on the leaf. In all three cases, the slide cleared the 'thick' screw-head with no interference.
I am left to conclude that the OP has a non-Krag screw or one with very unusual dimensions.
Another possibility is that, there is debris in the forward sight-hole and the screw is not fully 'bottomed' into position.
(The tapped sight-holes are easily cleaned out by soaking with a couple of drops of "Hoppes #9". A Wood Match or Cleaning Patch 'screwed' into the wet hole will clean the hole and threads of any debris).
Attached photos show: 1. Clearance of three slides over thick screw-head 1892, '96 carbine, & '96 rifle. 2. 1896 carbine sight with screws that can work. 3. Thick head screw in place on '96 sight.
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