try changing crafted="1" to "0" and then just make sure your other values mimic the same format as the standard m4. might work.
One other thing I've noticed for everyone who is having troubles - sometimes when saving or uploading the file it gets corrupt. I've noticed a couple times when the loot economy breaks and zombies stop spawning I have rechecked the file to find strange things like half of it missing.
Another thing when you start your server back, if you have broken something in the loot economy you should notice a drop in RAM usage that will persist until things are fixed. This can help you work out when its broken. If it can't read the full file it doesnt load it at all so the server will use a lot less RAM as there is no CLE running to spawn items.
The other thing is you gotta make sure all your values are correct and within parameters, e.g. setting a barrel (or anything) to persist more than 45 days = broken file. You also need to make sure you use the correct case for usages and values. e.g. military would not work. it is Military. or flip it Weapons wouldn't work for cat, its weapons
XML is a very dead set language, if you miss any tags e.g. <usage name="Military"> in stead of ..."Military"/> it will fail too. or missing a < or > or " will result in a broke file.
I recommend that you download your file (save a copy too) and then just change 1 loot type at a time. (Stop server first, wait a few min, upload or save edited file with just 1 loot item changed at a time, wait another few min start server check and see. Every time you make a successful change take a backup of that file too. Once you get in the swing of it you can add more changes but again do them in stages it works best (at least on a busy platform)
I have also found making too many changes at once just seems to choke up the CLE too. so really just be gentle, ease your changes in I'm finding my changes on Xbox server are working much better as I am now adding them in small stages of 5 to 10 types at a time... and letting it run a few hours to work in the changes.
I am also balancing my changes by reducing items that aren't very useful such as wrenches and things like that to prevent too many items trying to spawn in the map. The more you spawn the more it will bog down the server - try balance things