I found a diagram of your thread cutter...looks like there are TWO blades, one is moveable, on is fixed...sounds like you found the moveable one. I would try a drop of oil on the moveable blade that's sticking in the out position, and if that doesn't help, then compare it to the diagram and see if it was bent.
http://www.searspartsdirect.com/mode...0/1210000.html