If it comes to that, you can tune a S&W trigger to equal the Colt.
Different, but nice.
I wouldn't be concerned about what appears to be shallow rifling. Most .22's have rifling that may appear shallow, but really isn't. I've never seen or heard of a Colt .22 with shot out rifling. Damaged, pitted, and rusted yes, but never shot out with modern ammo. Find out what brand of ammo it likes, and you'll be astounded at the accuracy of a Diamondback.
If the cylinder has endshake, the proper fix is to stretch the cylinder collar. This should be trusted to Colt ONLY. They have the correct tooling. I've seen a number of botched cylinders by otherwise good 'smiths, who just don't understand Colt's. I've sent a number of .38 'D''s to Colt for this fix, but it's been a number of years, so I can't tell you what it would cost. Let's just say less than $50.00 to be safe.
Unless the "peening" is deep, I wouldn't worry about it, and at that price I'd grab it.
In my experience, I'd be surprised if there is really anything wrong with it. Colt's do sometimes get a small amount of endshake from wear-in of the cylinder. but, every Colt with real endshake I've seen was a .38. I can't remember ever seeing a Colt .22.
If this gun has a worn cylinder problem or worn barrel, one look at the outside will tell the tale---it'll look like hell, with worn bluing and scratches and scuffs.