To answer the OPs question, yes, you can rebarrel a 742. The question I would ask is "why bother?". Rebarreling a gas-operated semi auto will cost you about $400-$500, assuming you could find someone to take on the project. You could find a used Model 4 or a 7400 for less, and have a newer gun with fewer worn out parts.
BTW, the issue is probably excessive headspace, 742s are notorious for "growing" chambers.
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