[John Sabato]

Try this. Separate the top assembly from the lower.

CAUTION: It is very important that you NEVER put a live round in the chamber when the top assembly is separated from the frame because a Luger can be discharged by pressing inward on the front of the sear bar.

With an empty fired case in the chamber watch as you close the toggle slowly on the empty case manually and all should work smoothly with the extractor snapping over the case rim as the toggle closes. This should happen every time. If it doesn't, then the problem is definitely with the upper assembly.

My recommendations:

Clean the toggle inside and out with a good gun solvent and a stiff toothbrush. Clean all the components including the firing pin, the sear, and the bottom of the firing pin channel and make sure they are clean and lubricated. The entire assembly should work as smoothly as a clock mechanism. While the extractor is removed, make sure the extractor spring hole is very clean and there are no kinks in the spring.

Gently polish both sides of the extractor with very fine emery cloth or paper (400 grit or higher) and then carefully clean the grit off the part and lubricate it. Reinsert the extractor in the breechblock without the spring. It should move very smoothly up and down in its channel. If not, keep polishing until it does.

Once the part is moving correctly, then reassemble with the spring and test the assembly once again with the fired case in the chamber. All should work smoothly. Once it does, then reassemble the gun and do the same test with the fired case. Once again, the extractor should snap over the case rim every time. If it does not, then we have to determine where the obstruction is occurring and remove it.

Please post photos of your breechblock and extractor from multiple angles so I can see if there is any damage that might not be apparent to an untrained eye... I would also include multiple photos of your takedown lever individually as well as mounted in the frame.

I can't see that this "problem" will be that difficult to solve to make your Luger a reliable shooter.