I bought a PSA lower and upper. Built the lower using a Daniels Defense lower kit. The upper was built by a local smith, using parts from a couple of different manufacturers. My barrel IS stamped NATO 5.56, so it should run both calibers. Here is the issue.. first ammo purchased was Fiocci 5.56. First round wouldn't extract. Used a cleaning rod to gently tap out the round. The rim was ripped off of the casing. Several guys at the shop said that it was the ammo. Bought a box of Independence 5.56. Same thing. It ejected the first, ripped the rim off of the second. Back to the smith. "Try .223". I did, and it ran a few rnds, before starting to do the same thing. He took my rifle, bored it 1/1000th, and put in a  heavier buffer. It will now run .223 all day long. It will still not run 5.56. The smith has now recommended going to a T1 buffer, because he is now convinced that the extra pressure of the 5.56, is causing the bcg to operate too quickly. I'm beginning to lose faith in his ability. I've owned this rifle for 9 months, and have yet to enjoy a day at the range, without an issue.

Go no go gauges in 5.56

Huh?

http://www.brownells.com/gunsmith-tools-supplies/measuring-tools/headspace-gauges/clymer-headspace-gauges-no-go-prod40876.aspx

Check the barrel first with the said product above.

Then replace the carbine buffer with decent quality H buffer and spring.

Buffers usually cause a world of hurt but usually it won't cause the round to lodge like that.

Who's barrel are you using? Can you post pictures of the spent brass? Does it have rough marks on the exterior? The chamber may need to be polished or cleaned up with a reamer without cutting it deeper. The barrel manufacturer should be on the hook to fix this, if it's the problem.

I don't understand the statement "he bored it 1/1000". Bored what? The throat? Anyone other than the original barrel maker taking machining cuts on the barrel will void any warranty.

Do you have a Hornady Lock-N-Load, RCBS or Mo DeFina headspace gage so you can measure the fired cases? Again, headspace is set by the manufacturer and is it's not right from the factory they need to fix it.

Your gunsmith is trying to find a fix by trying things. The problem is probably deeper than as simple part swapping fix. There have been some barrels on the market new for under $100, you get what you pay for.

Fiooci ammo should run OK. The other brand, I've never heard of (Independence). Buy some generic Winchester or Remington 5.56mm M193 and try it. If the extractor is ripping the rim off the case, the chamber is too small in diameter at the base or very rough inside. Your extractor may need to be hand fitted to the shell case so it works without binding and to moves freely in it's extractor cut, but this isn't going to cause the case to get stuck in the chamber.

In the future, please return it to the manufacturer, prior to letting any gunsmith take any sort of cutting tool to the barrel.  It sounds like you might have a timing issue and a heavier buffer may help.

Everything has been checked and checked again. That's the crap of it all. It should work. I don't get it. Thank you for the suggestions. The barrel wasn't cheap. I paid $180. Rounds slide in, seat, and slide out with ease. I've asked about possibly swapping the barrel for another, and the idea was met with more suggestions. Again, thank you folks. I'm a newb with these rifles, in case you didn't figure that by now. Haha

So it appears you bought a stripped PSA upper and a 3rd party barrel, you mention $180.

So what barrel did you buy?  Length?  gas system?

Low pro gas block?  Info man info!

At first glance, I would have no confidence in you gunsmith.

ETA:  a dependable AR (with a 5.56 chamber) should run any and all ammo, not just .223 reliably.  A lighter buffer may be needed for low power ammo, but that's really not germane to this discussion.

Checked by who?  It is time to find another gunsmith.

This. Some of these other answers are a little
OP- your chamber is out of spec. Problems like these are common for PSA. You should've sent that upper back for a replacement before letting a pathetic excuse for a gunsmith bore anything out. I suggest buying a new barrel now that thanks to your "gunsmith" your warrantee is now void.

Allow me to further clarify. I picked up the PSA lower/upper combo, buffer/spring/tube, (2) stocks, (3) handguards, a few Magpul accessories, (3) mags, and most of the parts to build the lower, and some misc. parts. All for $150. The upper and lower had never been built before. I took everything to a highly recommended shop. The smith laid out what I had, and proceeded to make a list of what I needed to make it functional. He traded what lower parts that I had, for a Daniels lower build kit. The barrel was in a mesh plastic "bag". It was priced $179, and marked "L 5.56 NATO 1/7". I was assured by several folks there, that the barrel was a quality, chromoly barrel. As far as BCG, etc., all I know is that he said he used an "automatic" bolt. That is all that I know. Well, that and the fact that I have a total of $630 invested. As far as gas system info, etc., I do not know. I can post pucs. Please don't mistake this as being a smart a.. I am not. I really want to figure out the issue, or at least make a final trip to that shop, armed with some quality info/ quality argument.

When he said automatic bolt he was referring to an M16 carrier. Which is good, that is all I run. I am still positive your chamber is out of spec, and that that is your issue.

If you bought the barrel from your gunsmith at your gun smith's shop and he assured you that it was a good barrel and he installed it AND "machined .001" then he now owns said barrel if he can't get it to work. You need a different barrel. he assembled it for you from the parts he sold you and it presently doesn't work. If the barrel "is a good one" as he assured you then certainly the manufacturer will replace it if it's faulty.

Unless of course he doesn't even know were it came from because he picked it up in a trade or what have you. This falls back on the gun shop and gun smith and they'll make it right or they'll soon find themselves out-of-business because of bad publicity and poor customer relations.

Great point! If it was blemished from the start, and he tried to "fix" it, then it is his problem. I need to go up there tomorrow, and demand a new barrel.

A couple of comments,

.223 & 5.56 are the same chamber, it's the leade into the rifling that is different. 5.56 has a longer leade to reduce chamber pressure.

As to Fiocchi ammo, I'm not sure about their .223 / 5.56 ammo, but their 5.7x28 leaves a lot to be desired.

They have MAJOR QA/QC issues in 5.7x28

Both already mentioned and I would check these first. I would guess a combination of the two if some lower pressure ammo works. If the chambers rough extraction problems may start with all ammo after about 50 to 70 rounds.
Rough chamber
Large gas port

Shot lots of 223 Fiocchi never a problem multiple guns.

I have 2 ESS barrels from Anderson with the same markings. No issues with them. They were a $110 from what I recall.

16" barrels with carbine length gas tubes are often over gassed. Combine this with a .223 spec chamber/throat and you can get stuck cases and even popped primers. Ive run into it a few times. Two ways I have fixed it are replace the barrel or use Ned Christiansens 5.56mm +  neck & throat reamer.

Never assume because someone stamped 5.56mm on the part that its really 5.56mm. The people selling the barrel probably didnt cut the chamber. They have no idea if it was the first barrel chambered with a new sharp reamer or the 20,000th after its dulled and worn to the point it no longer cuts a true 5.56mm chamber/neck/throat.

Are they actually made by Anderson? On my very first build I almost bought anderson since the upper, lower, and bcg were all anderson, but ended up going with a stag arms barrel, which ended up working out to my advantage judging by OP's problems

this is probably the best answer here. rough chamber and higher pressure ammo will stick in the chamber tighter than lower pressure ammo.

I was told they were ESS blanks profiled by them. Just the same markings that's all. Mine have had zero issues.

Measure the gas port. That goofy smith may have opened it up.

This "smith" saw you coming that's for sure.  He laid out a list of stuff he could sell you not to mention ruining the warranty on your barrel.  Also, what "smith" refers to a bolt as automatic?

Did he sell you the barrel?  If yes, I would tell him to take all the shit he sold you off your upper and lower and take it somewhere else.
If not....tell him he owes you a barrel for screwing with yours.

If in fact the problem is identified as a too large gas port an adjustable gas block will remedy this issue.