It is obvious from the multitude of published loading data, the 204 is a finicky cartridge to load for. The cutting off the barrel 1" at a time is a rough indicator, since every barrel is made different by the different manufactures.
But due to the extreame expansion ratio a 22" barrel is ok and as I said before it looses little to a 24". Also a 24 " would be easier to aim with but the Handi makes up with the extra weight of the bull barrel. Good idea.
It is however desired like most of the high density cartridges that the best performance comes with a case full of powder that is close to 100% fill ratio.
Since I very much like the Hodgdon powders my selection according to "QL" for the 40gr bullet would be H335, Varget, BL-C2 in that order. For the 32gr bulet I would select H4198, Benchmark and H4895. A crystal ball would be good to have.
And of course the famous PPC powder N133 for both the 32gr and 40gr bullets.
I would not seat the bullets anyfurther than 0.200 into the neck even 0.125 would be ok in a Handi.
Also the 32gr is the fastest bullet I try to find a 35gr bullet if the 40 does not shoot well in the 1-12" twist.