Brian,
Confused about your terminology for a bit but reread. You apparently have several issues going on. One, you have a modified bolt handle--depending on how well it was machined/ground/etc, it could be binding on the bolt sleeve (the part that holds the safety in place and is held in place by the cocking piece). An easy fix is to mark the bolt sleeve where it turns against the bolt handle with a sharpie to see where it binds. Then stone or file it carefully to eliminate the binding.
Depending on whether the bolt was ever welded or ground upon, it could be warped or have damaged buttress threads inside the bolt. The threads on the bolt sleeve could be damaged as well. Both are easiest to fix by part replacement but gunsmiths would be needed as buttress taps and dies are expensive.
You will probably need an aftermarket safety as the std. Mauser bolt safety will not work with a low mounted scope--try numrich (gpc) for the sniper version or Timney and Buehler (Brownells or Midway) make sporter safety that swing from left to right rather than left, up, right.
Last, but not least, you may need to stone the safety if it is binding and make sure the cocking piece is not too long, short, altered, etc. A bad cocking piece or safety is usually a replacement item if it is too out of spec.
My personal advice is to pick up Jerry Kuhnhausen's Mauser Shop Manual (Amazon, Midway, Ebay, etc.) which describes in detail problem solving on Mausers and what is needed to correct them.