Congratulations on a great purchase. I have a 1995 vintage West Hurley and here's what I suggest.
1. Replace the "cheese grater" cocking handle with a rounded one from Kahr Arms. (this will save a lot of pain).
2. replace the M1A1 style butt stock and flat grip stock and vertical foregrip with a set from Dan Block (Deerslayer on Machinegunboards.com . These are much more attractive than the factory wood. he can even do a detachable buttstock conversion if you wish.
3. Replace the M1A1 style safety with a paddle style safety from Kahr Arms.
4. Replace the rear sight with a Lyman Thompson SMG rear sight.
5. After you have your tax stamp buy a barrel from
www.thompson barrels.com in black oxide finish (it will match your receiver). You will be happy with the results. If you simply cut down the 16 inch barrel, the contours of the cut down barrel won't look right. Even with extensive lathe work it may not look right. Your Thompson has a factory black oxide finish and is tough to match with blueing. BTW your Cutts compensator is most probably threaded on and a gunsmith may have to remove it and thread the new barrel. Newer Thompson's compensators are pressed on.
6. If your load does not work (seems light to me) I would try a 230 gr lead RN bullet, I like Missouri Bullet Company as they have some good ogive profiles on their 230 gr bullets. I would use a powder and charge which cycles the action my load is 5.3 gr of HP38/WW 231 over a 230 gr bullet.
My Thompson is in the picture below.