Issue we are having is when round goes into chamber projectile is pushed deeper into case thus making round 1/8" shorter
That is a huge change. Will the bolt close and lock in on a newly sized piece of brass?
If so, it could be the profile of the bullet. The ogive on the bullet may be seating itself into the lands and pushing itself back as you close the bolt. 1/8" is a LOT though..
./257 on a factory projectile? I'm with LJ, 257 is too small to shoot in a .263 bore, your accuracy should be horrible and you'd have all sorts of blow back as your brass wouldn't properly seal.