+1 on what Jerry said, "Remember this is a battle rifle NOT a match bolt rifle".
You may have reached the accuracy limit of your rifle, and no further improvement is possible (e.g. my AR-15 Sporter seems to be an honest 2.75 MOA rifle, no matter what tricks I throw at it. Some people have real honest 1MOA AR-15s, I am pretty sure that I don't).
Everything people have suggested above (use a stick powder, use higher quality dies, etc) are good and necessary for (e.g.) getting from a 3/4" grouping combo down to a 1/2" grouping. At your present level of accuracy though, you are probably dealing with bigger problems that that - so go after the bigger problems first. For example:
- is your scope mounted soundly, and is the scope itself good? (ideally, if you could put it on a match rifle and shoot sub-1" groups with it, you could verify that you don't have a scope problem. If you can't do this, perhaps try a different scope
- anything obviously wrong or loose with the rifle? E.g. is the flash hider loose, or installed crooked, or are there rattly bits inside, or does the receiver not lock up tightly (I know all these things are pretty unlikely on an H&K, but check....)
- is the crown good? Can you clean it off, and then have a look at the powder gas stain pattern after firing a number of shots? (it should be a symmetrical rose pattern)
- is your ammo generating correct velocity? You should eventually be able to get up to or near max loads (e.g. chrono them). Does this ammo shoot well, or not?
- try a different bullet. In particular, in non-match rifles, flat-base bullets often shoot a lot more accurately than boattail bullets. Extra low drag, high-performance boattail bullets can be particularly difficult to get shooting well. Try some Winchester 64 grain Powerpoint bullets (Higginsons has some the last time I was there).
- try factory ammo, if it is available and/or affordable. I don't even want to guess at what it would costs these days, but if you can find some factory-loaded Federal or Hornady or Black Hills match ammo (with 68 grain or 75 grain or 77 grain match bullets). If the factory stuff doesn't shoot better than your ammo so far, there is a chance that perhaps your rifle is simply shooting to its limits right now. But if some factory match ammo can shoot an inch, then you know that you will be able to get that with your handloads (in which case, try the same bullet and the same velocity as that good-shooting factory ammo).
- is your shooting up to the task? With another rifle and ammo combo, are you able to deliver (say) 1" 5-shot groups? If you're not sure, can you find another shooter who you know to be able to shoot that well, and see if he can coax anything better out of your rifle?
