I feel your pain!!! I don't have a Lizzy, but I do have a mid-arm. The guy I bought it from (a friend) spent an hour with those problems.......and I finally figured out what was wrong. He was putting the bobbin in the case backwards. The thread on the machine needed to go from "front to back"...he was thread it from "bak to front" just like his machine at home.
May not help...but have a friend come over and go over the booklet and thread everything again....then scream if it doesn't work....then call and threaten to take it back to them. And tell them you'll stand at their front door and picket them if they don't get it to work....:)