In my not so humble and invariably correct opinion you may have grip and operator head space and timing issues.
Group #1 is just fine so your fundamentals are not the issue. Assuming that the funny thing up and left of your group was your aim point you need to figure out two things.
Thing 1 - Are your sights out of whack? Either stick that puppy in a ransom rest, thereby removing the meat ware from the equation or find someone who's aim you trust and remove yourself from the equation. If the sights are off then fix em.
If the sights are not the issue its time to work on the operator's head space and timing. On to Thing 2.
Thing 2 - Examine your grip. I tend to shoot low and right myself and it's because I have the dirty little habit of squeezing the grip of my pistol with the tips of my fingers. This pulls my muzzle down and right. I have to focus on putting my grip pressure straight through the front/back axis of the grip to beat this flaw.
Of course this assumes you are right handed. If you are wrong handed you might be squeezing with your finger tips or jerking the trigger. Group like that though, jerking is not likely.
Thing 2.5 - Examine your self. My deep and again flawless psychotic, I mean psychic, sense tells me that frustration and conscious thought were the culprit that made group two the abomination it is. You probably saw where group 1 was and worked extra hard to make group 2 better. You thought too much and your brain got in the way of your body. Ask any really good athlete (shooters count too) how much they actually "think" about what they are doing when they do it and they are likely to tell you that they don't think, they just do.
The Japanese have a concept of "no mind" or "mushin" where the flow of action is allowed to happen without the interupting influence of critical thought. Look it up in wikipedia. They explain it much more better than I can. In a nut shell, your hand knows what to do but your brain is getting in the way. If I let myself pay attention to where my shots fall during a string of fire I can pretty much guarantee that my group will grow. If I just shoot my groups stay tight.
Of course I may be wrong and you just suck and don't deserve to have that poor Smith. PM me and I'll respond with shipping info. That poor little pistol deserves better than you.