It looks like Zastava is going to make it right, but another alternative would have been to have a competent smith remove the barrel and set it back one full turn and recut the chamber with a good reamer. You would only shorten the barrel by about 1/10 of an inch.
Thanks. I had another gunsmith recommend the same thing. Let's see what comes back from Zastava. If it still has the problem that will be the next step. Thanks again for the tip.