What did you come up with  you checked the entire upper receiver scope rail plain against the barrel extension.
Or, if you can indicate off the bore line of the barrel, you can compare that to  rail plain of the upper receiver  rail as well.

Next, indicate the scope center line to the rail as well to see if the scope base is giving you any MOA adjustment itself as well.

Bluntly, if you have the rifle bore line and the scope center center line on the same plain, then you are only dealing with just the off set distance of the two in height, and it easy to calculate the drop drop between the different plain , and the bullet drop itself.  

When things get hinky between the two instead (not parallel to each other), then you can end up with all kinds of problems with the match of the standard drop being off instead.

Myself, will start with the upper receiver itself in a jig, and run a dial indicator down the top of the upper rail to start with.  If needed and the upper receiver channel is not parallel with the top of rail, then easy enough to adjust the rig in the chuck, then come back and square the upper receiver barrel socket to upper rail.

Barrel gets install, then the built upper can be checked again to make sure that the bore line as well is parallel to the upper rail plain next.

As for scope base, here comes the rub and need to determine just how far you plan on pushing the rig, and if MOA offset is needed in the scope base too.

Once the base is installed, then rings as lapped to each other, and easy to go back and check the mounts to make sure that they are still on plain with the bore line via the lapping jig.

Also to point out, if you have the scope mounted high over the bore, can be causing the problem as well.
Note, chart only works when you have the bore line and the scope line parallel to each other, since a MOA scope will change the actual distance over bore measurement as well.
http://www.hornady.com/ballistics-resource/ballistics-calculator

Thinking that a barrel bore is concentric to the OD of the barrel is the wrong mistake in the first place.

If you put the barrel bore on two live centers (one at chamber, one at muzzle) you will be surprised of your findings of the OD of the barrel, and even that the bore itself is not straight between the two centers as well.


As for if the upper is completly true, again, if the scope base is adding in any MOA of adjustments that you are not accounting for, then it could be the problem as well.


Simply, the barrel is arching in the round to the target, and the scope is looking down over the bore to intercept it.  So since the bullet will drop .0017" (  http://gundata.org/blog/post/223-ballistics-chart  )from muzzle to 100 yards, the muzzle has to be aimed slightly upwards.  We have a scope that is having to look downward to pick up this arch since it mounted well above the barrel bore, and now have two intersections between the scope line is looking and the bullet arch patch as well.


So what we end up with is a near zero for 100 yards, and them farther down range past your 175yard mark, will be the second far zero instead.

Live center between the chamber (not the barrel extension) and the muzzle crown, then indicate the barrel extension to see just how far out of concentric it is to the bore line.

The huge one here is the mating surface of the barrel extension flange to the face of the upper receiver barrel extension socket!!!!


So my quick break down, I will mandel the upper receiver in a lathe, then adjust the chuck until I have the upper receiver rail running concentric to the bed.  From here, the upper receiver barrel socket can be trued so  the upper receiver will be aiming the installed barrel the same as the upper receiver rail or sights.


Once the upper receiver barrel socket is trued and ready to go,



Then it's time to attack the barrel.

So barrel between centers, quick chuck to make sure that the barrel is not bent/straighten if needed, we start with seeing how concentric  the barrel extension is to the bore line.  The huge one to check here is the flange on the barrel extension, and if need with only being off a few thousands of an inch, it can be faced to get concentric.  As for the long section of the barrel extension, it can be turned if needed, and when the barrel is installed, some loctite used for bedding to fill the voids between it and the inside of the barrel extension socket.
note, if the barrel extension is say .010" out or greater  from the bore line, then call the barrel defective and it needs to be replaced.  Hence you could square up the outside of the barrel extension, but touching the inside of the barrel extension lugs to get them back on square from being that far out, will end with the head space too long instead.  So few thousands and the bolt will not have a problem with this due the slop between it and the carrier that allows for the slight adjust.  .010" or more, nightmare going on with the bolt that is does not have that kind of slop to deal with, and your fitting a lost cause instead.

Once the barrel extension has been resolve, then it time to check the muzzle shoulder.  
So round stock in the bore to indicate off, and now get the muzzle section of the barrel running true in the chuck.
Now you can indicate the threads to see just how out of concentric they are to the bore, and even how out of concentric the FS thread shoulder is out to the bore as well. The thread being slightly out verses the bore is not the end of the world/deal breaker for a production barrel, since you can open the bore in a FS so resolve that, but its the back shoulder of the threads that may need to be squared to the bore so when the FS is installed on the barrel, it not cocked against the bore line instead.   If a Brake or Suppressor is to be used, and the threads are not concentric to the bore, then either the barrel is rejected, or the threaded section cut off to re-thread the barrel correctly instead.

Lastly, depending on the type of crown and how much turning you are going to do with the muzzle supported with a live center, if you are not planning of re-crowning the muzzle Live center will peen the crown when turning is being done), don't use the live center for support, but a steady rest instead.  Hence, break out some round stock, thread it 1/2-28 to thread onto the barrel threads, turn it so it's OD is concentric to the bore with it threaded on to the muzzle threads tight, and you can use the steady rest on it (instead of the live center in the muzzle) for the barrel extension clean up work..