A friend of mine recently purchased an L1A1, built on an Enterprise receiver, and brought it out to the range the other. He said that he has fired about 40 rounds of factory ammo out of, but had shot what few rounds that he had. It had been a while since I have shot a FAL, so I told him to bring it out, and I would bring some ammo to shoot it.

When he arrived, I looked it over. It has regular feed ramps, not the unibrow ramp. Everything on the rifle appeared to be ok as far as I could tell (I haven't shot a FAL in years).

We started off shooting at 25 yds, to see where it printed. My first shot using my reloads (once fired LC Brass, 155gr Hornady Match, 43.6grs IMR 4064), the bolt didn't cycle. I was able to eject the spent case, but with what seemed like more effort than it should have required. Stupidly, I shot two more rounds, with the same effect, without looking at the brass. As I was shooting the third round, my friend picked up one of the pieces of brass, and it had a visible ring above the rim, that appeared to be the start of a case head separation. The third and last case, had a crack forming around the ring area above the rim, and the neck was starting to form cracks. After seeing those issues, his FAL got put up. He advised that the other rounds that he shot, he shot them without any issues.

Later that night he called me, and said he thinks he knows what the issue is. When he got to looking it over, he noticed that the gas plug was on the grenade launching setting. He must of put it in wrong when he took it apart, and since its been 20 some years since I've shot one, I didn't even think to check it.

My question is, could just having the gas cut off (on the grenade setting) be enough to cause all the pressure issues with the brass, or could he have a headspace issue?

Sounds like headspace. The gas being on or off shouldn’t cause brass to deform like that.

On the plus side, the FAL is pretty easy when it comes to fixing headspace issues.

I'd check the head space.  That's the likely problem.

Agreed with the prior two posts: check that headspace. Gas plug position has no bearing on this issue.

The good news is this: if it needs a new locking shoulder, that's something you can do with a bench vice. It just presses in and out.

Headspace issue is what I was leaning towards as well, but he was kinda hoping the fix would be as simple as turning the gas back on.

Thanks for the replies!

I'm with the others.......... it seems to be a headspace issue.  

But you can always try again and adjust the gas system properly.  
You're shooting and playing with a rifle regardless............ win/win.