I would follow Thor's advice and see if this fixes the problem.
You never mentioned that your gun had a big, honkin' aftermarket barrel in your original post. This would reenforce the possibility of headspace issues, (as would your assertion that rounds will not extract).
The previous owner's mention that it had not been fired in 25 years may be for a reason; Someone had a shade tree gunsmith install an aftermarket barrel on the gun and when it would not function reliably, gave up on it and put it away. I would send the gun to Luger Doc and have him get it running for you.
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