Soo.. issue: Fires on action release

[DonVoigt]

Rich,
Take the side plate off and put it back together.
UNLOADED, try the action as you describe- does it hold back the sear?

You can tell by pressing on the sear bar plunger with a stick or something, it should go snap.
While you are pressing, check to make sure the little plunger moves freely.

If the sear contact points are worn, it is more likely to be the sear bar itself in my experience.
Take the sear bar out and clean it and its recess well, could be some junk in there.

If not- keep digging; if so, might be the trigger or side plate/lever fit.

If you have another functioning luger, swap the upper to another frame and try it; and vice-versa.