The first thing I'd do is throw those "high" rings you have in the trash. They are the Leapers rings that come with the Center Point scopes or you can probably buy by themselves. They are complete crap. If you don't want to buy another set of rings, I'd then mount the scope back in the original Weavers and cut the rail back slightly, so you can bring the scope back more. The Weaver rings are actually pretty decent rings. They are a pita to mount and especially to mount and keep the crosshairs level since it wants to twist the scope when you tighten them down, however, if mounted properly they are extremely strong and I've never seen a set slip. If you really want to check this mark the scope in front and behind the ring and then shoot it some and you will be able to tell if it moves.
Now, that said, with the scope as far as replacing it, that's really up to you. I've had a few of the newer Redfields and I think they are a rip off for the price. You can get much better glass from Burris, Vortex, Nikon, etc for the same or less money. I also think the Leupold VX-1 is a much better deal for not much more if you have to have a Leupold. That said, they are decent hunting scopes and since you already have it, I'd be inclined to just use it instead of taking a hit on it and then having to buy something else. You also aren't going to be doing any on the fly adjustments with it as it likely won't track well enough for that, but on most hunting rifles you will just zero it then leave it alone. Unless the scope is bad I doubt it's causing your issues.
Another thing to check is to look at the crown of the rifle. Make sure it has no dings in it. You can also run a q-tip around it and see if it snags on anything as it may have a ding that you can't see with the naked eye. If you have any issues there, it could really cause the accuracy to go downhill.
Now, my biggest suggestion is try to get someone else to shoot it. If I'm wrong here please forgive me, but it sounds to me like you are kind of new to this stuff and I know when I first started shooting, I couldn't shoot for crap. It's very easy to have large groups even at 100 yards if you haven't been shooting long and don't have the practice needed. I've got a feeling with that large of groups from a Savage, and in a heavy recoiling rifle like that you may be flinching. I've yet to see a Savage, even a stock one like that which didn't shoot very well, and I've seen quite a few. If none of those suggestions work, I'd possibly try another scope, but I'd also try a few different kinds of ammo. That's not the best ammo out there, but I've generally found the Winchester Power Points to shoot well in most rifles I've tried them in, so I'd be surprised to see groups that large from it. It couldn't hurt to try a few other brands though.
Also, what kind of rest are you shooting off of? If shooting off of the pictured bipod are you using a rear bag?
