Look closely at the extractor claw. There should be two fingers to the claw. It is not uncommon for one finger to break off, as the extractor snaps over the case rim when coming fully into battery. The extractor groove that the extractor lays in can get quite fouled and impede correct extractor function.
I have had good results with PMC 115gr FMJ ammo if it is available to you. You can perform a "plunk test" with your ammo to determine if it is cambering completely. Some Lugers can be quite ammo sensitive. I also own and shoot an Interarms Mauser Parabellum(and love it!).
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