pluckit,
That grouping isn't bad. If you experiment with a taller (higher) front sight, you'll probably get it to where you wouldn't have to hold so low. The windage is pretty good as well, a little tap to the right on that rear sight would bring that in. Here's something to try... Take a small piece of electrical tape and fix it to the front sight folding it at the rear of the sight so it will look like a much taller sight. You have to just by guess and by gosh it at first. Take several shots being careful not to knock the piece of tape off. If you're still hitting high, try a higher piece of tape. If your hitting low, trim the tape a wee bit shorter and try again. Once you get it hitting where you like it, just measure the height of the piece of tape you have on there and order a front sight of that height or a little higher (which will give you some leeway for file adjustment) from TOW or any good traditional firearm builder's site.
BPS