You let the inner set screw fall inside the lock case and now you have problems with parts inside the lock not moving the way they did before? Do you think there could be a connection? <Insert joke here about having a screw loose.>
Most of those screws were non-magnetic brass, but some were steel, so you could try getting it out through the cylinder hole with a magnet, or fishing for it with bent wire. If you cannot fish it out, here’s how to remove the lock from the door. (I do not want to imply that you do not know how to do this, so I am providing these instructions for other readers who may be less knowledgeable.)
After removing the cylinder, remove the inside knob and pull the outside knob and spindle out. If the outside escutcheon (rectangular trim plate) prevents that, then remove that as well. Take off the inside escutcheon, and remove the top & bottom screws on the front of the lock so you can pull the lock body out of the edge of the door. (A lock has a front side, an outside, and an inside.) If there’s lots of paint on the door, cut around the edge of the face plate so you don’t chip the paint.
Lay out something disposable like newspaper, junk mail, or a big rag to catch all the years of graphite, dirt, & dead bugs that’s probably inside. Before you take it apart, try turning it upside down and shaking it to get the loose screw out of it. Do NOT slam it against a hard surface! Cast iron is strong, but brittle. If a piece cracks or breaks off, it will require a very good metal worker indeed who can put it back together. I only knew one locksmith who could repair a cracked cast iron case, and he died almost 40 years ago.
Look at the lock body and notice that it’s sort of like a box with a cover. Place the lock cover side up and remove the, screw or screws holding it on.
Use your camera when you take the cover off the body to help remember where all the pieces go. It’s a 3D jigsaw puzzle inside.
Find and remove the loose screw and while you have the case open, clean out stuff that doesn’t belong. Put the inside set screw back, because you or those who come after you may need it as a spare. (Some locks have a round dust cover in the inside cylinder hole that the inner set screw holds in place. If you see one you have the option of putting it back or discarding it.)
While it’s open, look for places where metal is rubbing on metal and scribble those surfaces with a pencil. Pencil “lead” is mostly graphite, and is a good lock lubricant. Unlike the powdered form of graphite used in cylinders, pencil marks stay on vertical surfaces for years.
Before putting the lock back on the door, you may want to use some solvent paint remover and steel wool to clean up and polish the brass face. (The face may have been covered with a clear enamel, and it’s up to you if you want to try to replace that. I’ve tried a dozen brands that always failed after a year or two, and gave up after a Schlage factory worker described how they baked their parts in an oven to cure the enamel they use.)
Put everything back together and check that everything works before putting it back on the door.
The worst part of all this is that your mortise lock does not provide very good security. Its deadbolt is only 1/2 inch long, and the latch has no deadlatching mechanism, which means someone can push it back with a thin piece of plastic or metal when the deadbolt is not engaged. If you don’t replace it with a modern mortise lock, you’d be just as well off security-wise if you never locked it at all and got into the habit of always locking the upper lock each time you close the door.