"Thats correct but on the other hand, the frame would have been the only part that had to be remade."
Sorry, but that's incorrect.
The grip frame, the barrel extension, and the cylinder all would have had to have been reworked to ensure proper cartridge clearance had the gun been rechambered in .45 Long Colt.
OK, I've just found a reference to S&W's interaction with the Russians in the write up on Wikipedia, which claims that it comes from this:
http://www.sam-hane.com/sass/schofield/history.htm
However, in reading that article, I can't see where it says what Wikipedia says it says.
To be perfectly honest I do NOT recall reading anything of the sort in either Roy Jink's history of the company or Supica and Nahaus' books.
Even so, I seriously question the "almost went bankrupt" given the company very strong sales of both smaller frame revolvers as well as their other military contracts at the same time, plus the strong sales of their No. 3s on the US market.
"If they wanted to lengthen it to get another contract"
As I already indicated, S&W REFUSED an 1878 request by the Army for an additional several thousand revolvers because they didn't want to stop production of orders that they already had in order to retool the production lines.
IIRC the Army wanted no more than 8,000 revolvers, a drop in the bucket really compared to the orders that the company already had.
It doesn't make much sense to tick off the customers that you already have to comply with the request from a customer who may, but very likely would not, order a significant number of additional guns.
"S&W to my knowledge never made a 38 colt revolver nor a 41 colt revolver."
No, they didn't, and there are some pretty solid reasons why, really...
If you look at the different cartridges offered by the two companies, with the exception of the .45 Long, virtually ALL of Colt's cartridge offerings were heavily outsold by Smith & Wesson's cartridges to the point where Colt was forced to drop their offerings and chamber the S&W rounds.
Given that kind of success and acceptance, why would S&W want to adopt a whole series of cartridges that were largely inferior to their own?
Oh, and regarding the .38 Colt revolver... Yes, Smith & Wesson did make at least several hundred, chambered in .38 Long Colt, but they marked the guns .38 US Service Cartridge.
Those were the original run of Model of 1899 Hand Ejectors, which S&W was rushing to get to market, and did so before they could put the finishing touches on what, for all intents and purposes, would become THE universal American revolver cartridge, the .38 Smith & Wesson Special.
"They also didn't bother with a 45 acp design of their own until decades after Colt started making the 1911."
Well, if you ignore the 1917 revolver, and its post WW I counterparts, I suppose... but, given that Smith & Wesson didn't even seriously enter the semi-automatic handgun market until AFTER World War II (largely because they didn't have to their revolvers were selling so well), I'm not sure what your point is.
Also, one could turn that statement around this way...
Colt never entered the double-action handgun market (which Smith & Wesson entered in the 1950s) until decades after Smith & Wesson, and by the time they did the company was already so far behind the curve that they couldn't hope to catch up.... Not to mention that, pretty universally, their double action designs were largely flops both mechanically and in the market place...