M1 Carbine - Sighting-In Problem

Hello, all.

My good friend recently inherited his late-father-in-law's M1 Carbine. The rifle is in mint condition--the bluing is nigh-perfect and the wood stock has nary a ding or dent in it. It looks, for all intents and purposes, brand new and unfired.

Now the problem:

The rifle is extremely accurate. At 50 yards, properly benched, it will hold sub-3" groups using either his handloads or 110 gr. S&B ammo. However, the groups are a full 24" above the point of aim, despite the the rear sight being adjusted to its lowest position:

The front sight post is apparently not adjustable for elevation:

Any suggestions as to what might be going on, and how we can fix the problem?

Thanks!

(BTW, the red dust is just lint from the gun sock.)

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