[DonVoigt]

I agree that 1-2 thousandths is a lot of clearance, but see no reason not to use loctite.
It's not as though someone is going to overheat a luger barrel in a 1900 by rapid fire, JMHO.

I don't see how a step at the muzzle would help, as I believe the liners creep toward the muzzle; the step needs to be at the chamber end. The liner will have to have a big step there due to the chamber diameter.

For sure getting the barrel drilled/reamed concentrically is the key- unless one just wants it to look like a new bore.