Don't give up yet. That gun looks too nice to be a parts gun. I can't believe someone re-blued that if it was toast! You need to have an avid S&W fan who is familiar with I Frames (or older J and K frames for that matter, they are all so similar), open it up and look at it to determine what is the problem. They may not be able to fix it, but at least you would know why. If you have no one locally, I would volunteer to do it at no charge, just the shipping.
My suspicion is it was someone's "parts gun" and they didn't know what they were doing when assembling it. Possibly have incorrect parts in it.
I am not a gunsmith, but I am familiar inside an I Frame. I think I could at least find out what the problem is. PM me if you are interested.