You have the Number 4 Mark 2 version of The Damned Crack: draws are cracking out, likely from warpage and uneven bearing. Solution you have come up with should work, although I would use a screwdriver and spread the crack slightly and work some epoxy into it. Bedding, as described later, should build things up nice and solid.
Barrel should not touch on one side; it should sit centred and with upward pressure from beneath.
If the rifle were mine, I would take this in three stages, I think. Stage One would be checking the woodwork for defects (including cracks various and sundry) and points where the barrel might touch the wood. This includes that nasty place at the front, which should be sanded out until the barrel no longer touches. You will be able to SEE a polished bit where the barrel is bearing here, slapping around. Sand it out. You can do this easily with a chunk of doweling with 320 sandpaper wrapped around it. Sand out ANY place forward of the Chamber where the barrel has been slapping. If you have cracks, now is the time to repair them.
Stage Two begins once you have determined that everything is crack-free and solid and the barrel is free to move. NOW is when you bed the action and chamber, using as LITTLE bedding compound as you possibly can get away with. You are not trying to MAKE a bed for the action, you are just RESTORING the original Factory bedding, which actually was pretty darned good. They knew what they were doing; it's just that you are a victim of warpage from Time plus Humidity. I have done this to a number of rifles and I get 5 or 6 from a single Acra-Glas kit even though the instructions are to use the whole kit at one sitting; this is wasteful of materials as well as a shocking disrespect to the men who built your rifle. While you are doing this, pay special attention to the Draws, which are where the Recoil Lugs at the rear of the action meet the woodwork. The Draws should bear EVENLY; if they do not, build both up with the epoxy: the excess stuff will squish out when you assemble he rifle. Also, you will need to pay attention to where the Trigger-guard Screw (the so-called "King Screw", a term never used when the rifles were built) attaches to the Body. This is the main Recoil Lug and it must be solid. You will need to grease the screw itself, be careful putting in your bedding compound in this area, insert the horizontal screw in the rear of the Trigger-guard and use the forward screw to tighten the action down into the bedding. If you don't use quite enough of the bedding compound here, you can add more the following day, after wiping any Grease away from the epoxy which has set-up in the stock and cleaning carefully. Once everything has set-up, you can disassemble the rifle again, clean off any excess, put her back together and you SHOULD have a rifle with good, solid bedding and a totally-floating barrel.
Stage Three is making your Pressure Point at the muzzle...... and you already know how to do that. An easy way to get the pressure right is to clamp the STOCK (with your little dams already in place) into a vise upside-down, put in your epoxy and assemble the Rifle MOST of the way to it. Before tightening anything up, hang a bag with 4 to 6 pounds of buckshot in it from the Muzzle. NOW tighten the Rifle to the Stock. When everything sets-up, you SHOULD have something VERY close to what you want. If the finished Rifle needs a little more pressure, you can futz this with 1 or 2 strips of kitchen foil or a single shim from a pop can or a single strip of brass shimstock (it comes in a package of about 8 thicknesses from .001" to .030", available from your local auto wholesale or machine-shop supply). If the Rifle wants LESS pressure (which does happen some times) you can reduce the pressure with your dowel and 320-grit, sanding out a thou at a time until the rifle shoots its best.
It CAN be a long and laborious process, but the RESULTS are WORTH it. We used to go through this five-eighths of forever when getting the Number 4s ready for a shoot. Number 1s (SMLE) are MUCH worse, believe me, but, again, the results are WORTH the effort.
Good luck!
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