Originally Posted by Lou_NC

Sorry to hear about your troubles with a brand new .22LR revolver. Your situation is, unfortunately, fairly common........S&W is probably using their .22LR chamber reamers too long before replacement. A worn chamber reamer will result in an undersize chamber, it's as simple as that.

One solution is for you to use a finishing chamber reamer and complete the job yourself that S&W started for you. I've done this on numerous S&W .22LR revolvers, model 18's, 17's and 617's. All have retained every bit of their inherent accuracy, as the chamber reamer does not affect the throat of the cylinder, only the chamber portion. Check out this thread for additional information.
The tools you need are:
Brownells reamer: 513051220
Brownells Do-drill lubricant: 083007016

If you're not comfortable doing this job yourself, or don't want to undertake it, based on principle alone (totally understandable considering it's a brand new gun) then go ahead and return it to S&W, and hope they make it right.

Good luck,
Lou