Kudos to Rain. He spotted the problem area. I finally got this old Kenmore back on my bench to figure it out yesterday evening.
I took the back shell off to watch all the tension parts work. As I raised and lowered the presser foot lever the disks in the top tension did not move properly. The outer one was stuck inside the numbered nob. Rather than risk taking it apart, it's totally unlike any I've worked on before, I hosed it with Liquid Wrench penetrating oil then turned it through it's travel and back a couple times.
After letting it sit a while I worked the presser foot lever and ... OH JOY, the tension disk was moving in and out as it should. So I threaded the machine up, stuck a scrap under the foot and hit the throttle. Whooo Hoooo it's working again!
We were all looking in the wrong areas. The problem had nothing to do with the feed dogs, the needle, the feed dog drop mechanism, or any tension settings. Apparently when I tilted the machine up to show my wife the feed dog dropper, some debris shifted and jammed the tension disk. That's all.
I got the machine back together today and spent quite a while with it sewing smaller pieces into larger pieces for my quilt. She sews again. YAY. Oh, and I've named her Betty.
Joe