I have the innovis 700E ll and this is what happend to my machine.
There is this little white hook you see right next to the arrow and the number 4 and the thread was all the time running over it. You dont see that if your machine is closed but there is only one screw in the back you have to loosen that you can pull the cover to the left.
With the time the thread was forming a cut into this little thing and got stuck there and of course broke all at the time. I should bring the machine to have it fixed (most probably one just can take it off ) but if I have to embroider something right now I open the cover and make sure the thread is going behind the metal part left to the arrow - and it runs fine!
Hope this helps...........was about to throw my machine out of the window till I found out about this in another forum
Granny