Jim,
Without a manual or more specs I'm a bit leery of altering the needle bar setting. I do know from visual inspection that when the timing mark is at the base of the bushing the hook is not where it should be.
I don't know if the timing was knocked out by the needle chewing up the hook or what. I've got to do some more comparisons with my other clones.
Right now I'm trying to get some other machines finished so I can put them on CL so this one is sitting for a while.
Joe