(Original thread here: Is your machine picky about thread? My Pfaff 130 is!)
I had the throat plate off and my paint brush out, sweeping for lint bunnies. As I turned the hand wheel, I thought something looked odd, so I took the feed dogs off for a better look. Turns out, the hook was so tight to the needle it was deforming the needle as it passed by. It took me longer to find the metric allen wrenches than it did to move the hook back, although it did take a couple tries to find the 'sweet spot'. I am now happy to report that Ludwig Nahmaschinen sews just fine with any thread I use, including cotton.
Lesson learned: When all else fails, check the hook, too.