Have you use the dental floss to clean the upper thread guides? I have the 270D and it has done that a time or 2. Be sure to use the "unwaxed" dental floss.
I just had my PE700II start eating fabric today and I about freaked out. I'm in the middle of a project with a deadline of tomorrow. I cleaned everything really good, did a shutdown on it, removed, clean and replaced the embroidery unit and have had no more problems...keeping fingers X'd!!