Yeah, even with the corrections you made, it still shouldn't be that loose. In my Judge, .45LC is just a teensy bit loose, just enough that if you tilt the gun back and shake it a bit the cartridges can back out of the cylinder slightly and come into contact with the frame, but even then they don't back out nearly enough to lock up the cylinder nor for the cartridges to bulge when fired.
Granted that the Judge is a slightly different animal from the Governor since they Governor has a larger cylinder for an additional shot and clearance between the cylinder/frame would have to be slightly larger to accommodate the thicker rim of .45 ACP + the Moon Clip, but it still sounds excessive even with that in mind. (Plus the ammo malfunction sort of speaks for itself.)