I have the very same machine and have had the very same problems. I did end up getting a new bobbin casing and it started working better. Another thing, if I use pre wound bobbins and cotton thread on the top, I get the big loops and a mess. If I use Robinson/Anton polester (blue spool) I have no issues at all. The machine seems to like only polester thread.
I bought my machine at Quilting Connection in Ames Iowa. Margie that works their has helped me out a lot. She not only sells the machines but is also a quilter.
Hope this helps. When the machine works it is a fabulous machine.