A lot of Smiths hit on top of the front sight with 158 gr loads. That is the bread and butter bullet weight for the 38 Special. If you are shooting fast, light bullets they will print lower. When you say the gun is hitting low enough you can't see what you want to shoot, how low is it hitting at 7 yards? Does it hit low for everyone?
I would be reluctant to grind the front sight. Try loading three rounds and two empties and make sure you are executing perfectly every shot. You may be hitting low because of the way you are handling the gun.
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