I have found most budget to mid priced rimfires to be greatly improved by pillars and bedding and floating of the barrel, both when cold and hot. The only 17hmr I have is a Marlin, but I found groups became much smaller and much more consistent when the rifle was given pillars and an epoxy bed as well as the barrel channel opened up to really be free floated when the barrel heated up. I found the same with the CZs I have as well as the Savage MkII. Lets be honest, these rifles are built fairly inexpensively and a great stock to action fit isn't always, or even often, the case. The more expensive rifles have more attention spent in this area but for these less expensive rifles it is often overlooked.

Also a point to realize is the wind. I know a lot of guys who can shoot centerfire rifles at 100 yards sub-MOA without hesitation. More than a few can push 1/2MOA as well. These guys have good form but also use bullets that have a fraction of the wind drift at 100 yards that even the .17hmr has. Put them behind a rimfire at 100 yards and things look a lot uglier. Even a 1mph wind change results in groups opening up over 1/4 of an inch. Wind changes of a couple mph can quickly turn a rifle that is capable of 1/2MOA over 1 or 2 MOA, even with the best form and follow through on the trigger. I personally don't use flags and don't know how much their changes tell me to adjust. As such I need a PERFECTLY consistent condition to have any real chance of the groups coming out MOA or less at longer ranges. The rifle has shown at closer ranges to be quite capable of holding MOA but 100 yards really takes a bit of skill, assuming conditions aren't 100% perfect. Guys who get better results at these or further ranges have a great ability to read wind, shoot in great conditions, get lucky, or are lying.

I wouldn't doubt that bedding is a bit of the issue, but I also wouldn't be surprised if part of the problem is that your range isn't giving you amazing conditions to shoot in as well. I would first try to bed the stock. Like I said earlier that turned my 17hmr from a 1.5-3MOA rifle to a .75-1MOA rifle, again though at either close ranges or under perfect conditions.