The firing cycle of a luger is more finely balanced than more modern designs. It was, after all, one of the very first semi-auto handguns.
The hold open is normally held down by a very small spring mounted at the front of the hold open part which rests in the frame below the receiver. When the magazine empties, the loading button pushes this lever up, overcoming the spring tension.
It sounds like that spring might be broken or not effective at holding the hold open part down. Take the canon/receiver assembly off, and get a good look at the part as it rests in the milled well on top of the frame.
Does it push up without binding? When you push it down, does it push right up?
Might be some dirt down there or a damaged spring.
Marc
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 Igitur si vis pacem, para bellum -
- Therefore if you want peace, prepare for war.
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