I picked up one of those Tapco Colt M16 kits last year, ground the bolt carrier to AR15 specs and threw the fire control parts in the garbage and had been shooting it about once a month.  Recently, I bought a field gauge and checked my AR15s, the Colt upper failed and would swallow the field gauge with two fingers pressing on the bolt carrier (one finger pressing lightly isnt enough to close it).  I swapped the Colt upper's bolt with my Olympic Arms's upper's bolt (that upper passed headspace) and vice versa, both uppers would not close on the field gauge when using the opposite bolt.  

Since the Colt upper has a chrome barrel, I'd like to avoid rebarreling it for now (I'm a college student, money is scarce), is buying a new bolt a viable option in this scenario?

Kharn

Buying a new bolt may have absolutely no effect on the issue if the barrel's chamber face is out of spec.  You could try to borrow a bolt from someone else and see if it makes a difference but in general, for a rifle to fail headspace either the bolt or barrel has to a good bit out of spec.  I think it would be unusual, but possible, for both the bolt and barrel to be out of spec.

Good luck.  I would also suggest you STOP firing that rifle until you get this resolved.

CMOS

Considering the outside of the rifle (it was surplused by the military and the upper is beat to hell, lots of wear from where a belt buckle would scratch the upper during marches), I think its both the barrel and the bolt that are worn down. I can put the bolt in question into another rifle and that rifle will pass headspace, and when I put a different bolt in the upper in question, it will pass headspace as well.  I'd just like to know if this would be a long term solution, or would the new bolt wear quickly and I'll end up replacing the barrel after only a few hundred rounds anyway?

I stopped firing .223 in the rifle a couple months back because my shooting buddy mentioned the headspace seemed bad (took me a while to build up a Brownells order big enough to save on shipping), I've just been using it with my .22lr kit as a plinker for when my girlfriend comes to the range with me.  

Kharn

Kharn, in that case it will depend on how far out of spec the barrel/bolt combination is.  A new bolt will eventually have the  finish worn off the bolt face.  Is that enough to pull it back out of spec?  That will depend on on the chamber face of course.  It's a toss up on how to handle the problem.  A bolt will be a cheaper solution.  Just be sure to re-check the headspace abobut every 500 rounds or so to be sure it's still in compliance.

CMOS