On Colt double-action / hand ejector revolvers the cylinder is locked in the closed position by an assembly, consisting of (1) cylinder latch (thumbpiece) (2) latch pin (goes into the ratchet star and locks the cylinder) (3) latch spring, and (4) latch spring guide (plunger).
All of these are nested in the sideplate except the latch pin, which fits in the frame. If these parts are not free to move because of an accumulation of gunk and fouling the latch pin will not fully seat, and the back of it can prevent the safety lever (hammer block) from moving downward so that the hammer can travel forward far enough to allow the firing pin to hit the primer.
When the safety lever is blocked, the hammer can be moved slightly backwards, and thereafter everything freezes up. This seems to be what is happening in this instance, and it is known that the lockwork in this revolver is indeed coated with gunk.
There are two possible solutions. One it to take the revolver to a QUALIFIED gunsmith (and they don’t grow on trees) and have the internals thoroughly cleaned and lubricated. The other is to return it to the Colt factory for a cleaning and tune-up. The later is much more expensive, but a guarantee that when you get the gun back it will work, and not be messed up.