Pete:
I had not thought of ASSRA. Thanks for the suggestion. The reason for the drop in bullet weight is the twist - the rifle has the original .310 Cadet barrel, rechambered, and the twist is not likely to stabilize a 165 grain bullet at low speed (or perhaps even at high speed).
Topgun:
The gun is a Martini, not a Marlin. Think British military rifle of the last century (ever seen the movie "Zulu"?). These were minature versions of the military rifle used for training, primarily in Australia. The action is the same size as the BSA Model 7, 12, 12/15 and 15 series, although it's a centerfire, not a rimfire action.
The .32-40 has an excellent reputation as a target round, so I'm not surprised that you found it shot well in the Marlin. Marlin lever actions are surprisingly accurate with the right ammo.
