You also don't want to use that much powder (each rifle is different) for priming, I usually use less. Also, don't dump the primer powder right at the touch hole, middle of pan is better. See how large your touch hole is, a 1/16th (.0625 inch) should work, I wouldn't open it too much more, I've done it before on stubborn rifles where nothing else works. As was stated, a little countersinking of the touch hole will help guide the flash into the barrel.
Try different flints, I know they can be hard to find. My source has moved and I lost contact with him. Will have to get more the next time I go to Freindship, In. Experiment how you place the flint in the jaws, some locks like the edge sitting higher, so turn the flint.
As for the the loose barrel, that sure won't help with accuracy. Take the barrel out, protect from getting scratched with rags, place on a hard surface (such as a work table), and then tap the lug down. Check often to see how well the key fits in now. If you tap down too far, just file a little till the key fits snug. You can put a slight bend in the key, but that can just cause other problems if your not careful when putting it in.