There is evidence of early featured carbines in use by the 1st Provisional Brigade early in the war. It is said the need for weapons was in such great demand that they pulled them out of mothballs from WWII and handed them out and that was that. In fact the demand for bodies was so great, the vet above never even went to boot camp. He went straight to the fight.
Now for this Underwood, I imagine he changed the flip sight and type I band. I think it was probably a pretty well original rifle except for the upgrades and the vet might have wanted to swap it to something more original. I don't think you could piece this together from an armory rebuild and have it all match like that on the rest.
I did talk with some Marine experts offline and they agreed they think it at least appears to be Marine Corps finish. I'm hoping the family will be able to provide more evidence of where it was acquired. It might have been just luck he found one in say the 60's that had that finish. It's hard saying.
As far as stories go, I've been able to document some kick butt stories. I agree most are crap, but some stories are real. That is why it is so important to investigate everything and see what all you can document. Looking at the rifle the story does seem plausible, so that is why I am investigating it more.
But here is a pic from Korea of the First Provisional Marine Brigade near Pusan. That carbine sure looks like it has a type I band. For the 7th Marines, the unit this vet fought with, all pics show the late features. Again I think this one has probably been changed. Just showing early featured carbines did exist in Korea.