Sure looks like a good shooter, as most 404s are.
Odd that it will only take two down. Perhaps the mag was shortened up when it was restocked for some reason.
Does it almost fit three down or not even close?
Maybe the follower or spring was changed sometime in its life. I once had a Mauser that wouldn't fit as many down as it should have and the reason was that the spring had broken and had been brazed back together. The repair was so thick, it couldn't get the last cartridge in the mag.
Jeffery named it the "404" because it was a 40cal. 4 shot rifle and I would think that an English proved example would fit three down.
Buck, did you flip the rear sight back to the "normal" express arrangement before shooting it?