Having eliminated most of the problems I'd say the knee lever assembly is loose, worn, bent or a combination of the three and is not pushing the nob on the controller all the way down.
The one in our Singer 338 cabinet was like that. I oiled it, straightened it, tightened it. Tried to adjust it, but it just would not push the controller button down properly.
Finally I had to put a piece of rubber hose on it to give it more push. That did the trick.
Joe