The cylinder/barrel gap looked reasonable to me, although I didn't have any feeler gauges on hand.
I guess I'm not following how improperly setting the barrel cylinder gap could allow endshake. Regardless of the size of the gap, if the Dan Wesson design is generally similar to other revolver designs, the cylinder still shouldn't have any significant play along the bore axis. Seems to me that the endshake should be the same whether there's even a barrel installed or not.
I can see how installing the barrel deeply enough could push the cylinder back far enough against the existing play to eliminate it, but wouldn't that prevent the gun from functioning? There would be no barrel/cylinder gap at all since the barrel would have to be in contact with the cylinder to hold it to the rear to eliminate the endshake.