I suggest field strip the pistol, remove the grips, load the pistol with 2 snap caps (dummy rounds) and carefully scrape off the first one with your finger on the open frame, while closely observing the action of the hold open. The hold open may be binding (not retracting fully), the hold open spring may be bad, or perhaps there is some other issue that can be discovered with this test. All that said, hold open issues are often mag issues and not all mags (even MecGars) are created equal. Recently I had to try four different MecGars to finally find one the one that would correctly operate the hold-open on a Mauser shooter. In my case, older MecGars would not operate the hold open but a new one did; the new ones seem to push the hold-open up a tiny bit more. Perhaps you try an older one? Again, G.T. might be able to help.
Depending on what you find, another option to improve magazine performance is to send it to G.T. and ask him to install a stronger aftermarket spring. While I don't think the mag spring is the problem, part of fixing Lugers esp. magazine related issues is simply trying many different things until one works.
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