raven,
Chill dude........ Your rifle is NOT ruined. Far from it. That muzzle looks fine... and THAT's where it counts most on a barrel.
Tool chatter to some degree is acceptable and would even be considered "normal" in an issue grade rifle barrel. I have a couple (and have seen more) barrels just like yours. One is even an LMR.... which is supposed to be one of the best GI barrel's out there. It shoots fine, as do the others that show this type of chatter.
I'll bet yours does too, after you do a THOROUGH accuracy testing with it.
Remember too.... You have a MILITARY rifle, NOT a target piece. GI accuracy spec only specifies that a rifle be able to shoot 8 rounds of M2 ball into 4.0 MOA @ 100 yds. That's not anywhere near Match accuracy..... and it's not meant for that.
You wrote:
Yesterday when I was shooting it at 50 yards the groups opened up bigtime after the barrel was hot.
Groups opening up on a hot rifle is a common thing and numerous causes exist... but it's doubtful that the chatter marks in the bore are one of them.
Check for wood fit... tight buttstock, loose handguards (YES, loose).
Do more shooting at 100 and beyond. There are too many variables to get meaningful accuracy test results from 25 and 50 yd groups. And don't be in a hurry. Do it slow, do it calm, do it right. Either shoot from a SOLID bench with bags at both ends (don't put one under the handguard, buttstock only), or from a solid sling supported PRONE position.
Use good ammo. Personally, I don't think much of the accuracy of the Korean stuff.... and to be truthful, LC-69 is not the best out there. I prefer LC-66 or Danish AMA for my M2 tests (my rifles do too...). I have not shot any yet, but I hear from guys who've tried it that the Greek HXP M2 that just became available is supposed to be great stuff accuracy wise.....
In a nutshell.... if you are excited or bummed about the rifle in your hands, you are not going to shoot it well. You might surprise yourself if you shoot calm and give the rifle a fair shake that's not based on a visual "boo-boo".
Just my thoughts on the subject.
Swampy
Garands forever