Al,
My soul cried out when I saw the rifle on one of the consignment carousels. Its action is smooth and positive, and the only thing I did was a tear-down to check for burrs, give the innards a thorough cleaning and lubing, and the previously mentioned poor man's trigger job.
The .38 Special is the same overall length as the original .44 Henry rimfire, but the Henry used a heavier bullet (215-grains?) and had more velocity (1200 fps?) than the .38 Special, so I think the .38 Special chambering is perfect for the rifle's action. I agree with you as to chambering the weaker actions of the 1866 and 1873 in magnum cartridges. Just because it can be done does not necessarily mean it's a good idea. I cringe when one of the range regulars shows up with his .357 Mag. 1873 clone.
Michael