Back in the 60's, I had this issue with Dixie locks on occasion. As you noted, I honed the sear and tumbler, then using a propane torch and casehardening compound, casehardened the sear and tumbler. I would have no more issues with that lock. I don't think poor steel is an issue with casehardening. You may try to temper the parts first and see if they can be hardened in the normal manner. If not, caseharden them We used to use Casenit, but I understand it is no longer available. Someone else can tell you what is used today as I don't know.