brushandthimble, I would oil and grease the machine completely - have you taken the top off and soaked everything? I had to stand mine on one end and sew with it in that position to force oil under one part that used to groan. Have you taken the bottom off and oiled everything, too? The grease ports are listed in the book. I have had the problem you're having when thread got caught on the notch in a Coats & Clark thread spool.
greenini, something like that is my biggest fear with this machine. That's why I'm looking for a back up. I'm sure someone on the vintage thread can help you.