Do you have any .45 ammo around? Try to insert a .45 round in the chamber while the gun is field stipped. It sounds like your barrel is not for a 840. The bulge from the spent case is due to the slop in the chamber. The brass will expand to the diameter of the chamber. Ask your reloader friend to check the barrel of your gun against a Caliber gauge to make sure. I would stop using the gun first to make sure it is the proper caliber. Running .40 in a .45 barrel can be ver dangerous and it won't be accurate at all.
If you can post pictures of the spent casing and the barrel with a round inside maybe I can help you diagnose the problem better. Lastly check the serial number of the barrel against the frame just incase.