Any change you could elaborate a little more on how it failed to extract? Is it stovepiping (the casing is getting caught in the ejection port as the slide closes) or is it just not being pulled all the way out of the chamber? Polishing the feed ramp can help with failures to feed, but not to extract. Good method that you used though, I've used the same exact part for my dremel.
I'd suggest trying some heavier ammo, 124 grain, cleaning the extractor, and just lightly lubing everything like you did. Hoppes oil is good stuff, stay with that.
If all else fails, go to a gunsmith or send it to Taurus, anything else and you risk voiding any kind of warranty policy that might exist. Midwayusa.com has a gunsmith locator tool that comes in pretty handy. Good luck with it.