The needle seems to be placed correctly, it is not threaded from front to back but from left to right... and right now the thread seems to run smootly, as far as the top thread is concerned...
When I pull the wheel towards me, the bobbin case rotates towards me pretty smoothly too. Only the top thread gets tangled around the bobbin and the bobbin case instead of picking up the bobbin thread. Gah.
Yup, it is rather frustrating! I hope to find a solution and to turn this machine into something I can use.