Slammer,
Vertical spreads are typical of thin barrels and I have an old 1921 SMLE that does this, but it walks up the target, not down. Stringing up the target is typical so in your case something else is happening but related to heat. You can tighten up the screws etc but the gun already shoots well when it is cool, so that eliminates everything except heat. The free-floating aspect might be the cause but if there is space around the barrel and the only thing connecting it to the rest of the gun is the gas tube then that is as good as you are going to get.
My money is on one of two things; you've got a dud barrel or the mirage above the barrel is messing with how you see the target through the scope. Dud in the sense that your barrel is shifting too much when it heats up. As for barrel mirage this is most noticeable on a calm day and at night when the wind is not helping blow the boil away. In bright light it is there but we don't notice it, more or less. I do a lot of shooting at night when it is calm and it is definitely noticeable, especially with a suppressor. The air boils after about the first 10 rounds. Cranking down the scope and waiting between strings helps. Taking off the suppressor helps with mirage but then you don't get the benefit of milder recoil and gas taming behind the bullet. Bench rest shooters often use louvres above their barrels to deflect the boil from the scope axis. In an AR doing that that is pushing reason and given the very specific stringing mirage is possible but unlikely. Usually mirage just blows groups out or you get one round wide. So, I would do your checks while considering buying a better barrel.
Lazy's situation above could also be the reason, if your extension is glued (gluing extensions is contentious and opinions vary).
Vertical spreads are typical of thin barrels and I have an old 1921 SMLE that does this, but it walks up the target, not down. Stringing up the target is typical so in your case something else is happening but related to heat. You can tighten up the screws etc but the gun already shoots well when it is cool, so that eliminates everything except heat. The free-floating aspect might be the cause but if there is space around the barrel and the only thing connecting it to the rest of the gun is the gas tube then that is as good as you are going to get.
My money is on one of two things; you've got a dud barrel or the mirage above the barrel is messing with how you see the target through the scope. Dud in the sense that your barrel is shifting too much when it heats up. As for barrel mirage this is most noticeable on a calm day and at night when the wind is not helping blow the boil away. In bright light it is there but we don't notice it, more or less. I do a lot of shooting at night when it is calm and it is definitely noticeable, especially with a suppressor. The air boils after about the first 10 rounds. Cranking down the scope and waiting between strings helps. Taking off the suppressor helps with mirage but then you don't get the benefit of milder recoil and gas taming behind the bullet. Bench rest shooters often use louvres above their barrels to deflect the boil from the scope axis. In an AR doing that that is pushing reason and given the very specific stringing mirage is possible but unlikely. Usually mirage just blows groups out or you get one round wide. So, I would do your checks while considering buying a better barrel.
Lazy's situation above could also be the reason, if your extension is glued (gluing extensions is contentious and opinions vary).