"Yes, the spring is there. It doesn't drop back down like it should, so the thread just runs straight through like there was no spring at all."
There is more than one spring in a tension. There is a thread spring and a spring inside. One of the springs could be in the wrong position. The tension pin could be missing or in backwards or not hitting where it is suppose to - if all the parts are there, it is a simple thing to fix if you follow the directions step by step when you take apart and redo the tension. When you lift the foot lever do the tension disks travel at all? If the pin is missing they won't - The pin runs through the tension and that pin sticks out the back and hits the foot lever. Are there any set screws missing? I have one with 2 missing screws - impossible to fix without the screws. I'm waiting for some screws maybe from a junk machine. It will act as you described if it has parts missing or if the parts are not assembled right. You can also just buy a new tension and put it on there but you may have to adjust the way the spring is set anyway.
You do not need to dis-assemble anything other than that tension and the bobbin area. Put a drop of Tri-flow on every moving part. If there is a lot of varnish and nothing moves, you might have to get more aggressive. Most of the varnish doesn't matter one little bit - it is the dried up varnish/oil you
don't see that matters. Muv has a wonderful video about cleaning and oiling a machine:
http://www.quiltingboard.com/vintage...v-t167789.html this is on the sticky notes at the top of the machine page as well. Maybe we can talk her into doing a video about how to rebuild a tension...