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just chalk it up for loss and just find another smith with a good reputation?
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Getting into a peeing contenst with the smith will get you nothing. Since he bluffed you when you picked up the gun, I don't see him getting all remorseful later and addmitting a mistake, let alone giving you any money back.
He might, but I doubt it. But all you have to lose is your time, and travel expenses. I would just write it off as a lost cause, unless, when examined by a competent smith, that smith tells you the gun has been damaged by improper work/assembly.
If that's the case, then the first smith does owe you compensation. Good luck getting it, sadly. You might have to resort to small claims court as a worst case. If that happens, be sure to include the Better Business Bureau as part of the complaint process.
Hope you can get the old Colt working right again.