Hrm. Not sure if any of this will help, but a few thoughts...
You only mention "the key" in your post; is the lock showing the same symptom with more than one key? (My first assumption would be that the key is either worn down at the tip or it's a copy that was cut incorrectly, rather than a problem with the cylinder.) If that's not the case, and by "angle it up" you mean pull the head up, then my next guess would be that the warding in from of the plug is worn down?
I've never run into a KW1 mortise lock, but you seem confident in that, so it's likely just that they're not common up here. I'm a bit confused by this part, though:
jarrod0987 wrote:If I change any of the pins the plug will not go back into the cylinder.
You say that "the shear line is correct", so I'll assume that the pins are fitting properly flush with the top of the plug when the correct key is inserted. How far in does the plug go before it stops with replacement pins?