It's a hammer block, not a transfer bar, so the action will work without it, but without it you have a potentially dangerous situation if the hammer were to receive a hefty blow. And the hammer block falls out when you take off the side plate if you're not careful. It's possible a previous owner removed the plate and then did not get the hammer block positioned correctly when he put the plate back on, and that could have caused the initial problem.

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Pisgah