Since you are using titlesec, it would make sense to style the chapter this way, too. The following approximates the style you are using, although you may wish to adjust it slightly for an exact match.
I also use geometry rather than setting the page dimensions manually. As I mentioned when answering an earlier question, setting them manually is not advisable.
\documentclass{book}
\usepackage{fancyhdr}
\usepackage[calcwidth]{titlesec}
\usepackage{geometry}
% Don't set layout manually
\geometry{letterpaper,width=5in,left=2.5in,asymmetric,verbose}
\usepackage{kantlipsum}
\titleformat{\section}
{\Large\bfseries}{\thesection}{1em}{}
\titleformat{\chapter}[display]{\Large\sffamily}{\filleft
\MakeUppercase{\chaptername}\quad{\Huge\thechapter}}{40pt}{\titlerule[.5pt]\vspace{10pt}\filleft
\MakeUppercase}[\vspace{10pt}{\titlerule[.5pt]}]
\titlespacing*{\section}{-25.4mm}{*4}{*1.5}
\titlespacing*{\chapter}{-25.4mm}{*6}{*10}
\pagestyle{fancy}
\fancyhf{}
\renewcommand{\sectionmark}[1]{\markright{{\itshape #1}}}% \it ought not be used with LaTeX 2e!!
\fancyhead[LE,RO]{\thepage}
\fancyhead[CE]{\leftmark}
\fancyhead[CO]{\rightmark}
\fancyheadoffset[lh]{25.4mm}
\begin{document}
\chapter{Chapter One}
\section{Section One}
\kant[1]
\section{Section Two}
\kant[2]
\section{Section Three}
\kant[3]
\section{Section Four}
\kant[4-8]
\end{document}
