Usually with the needle flat on the wrong side, the machine will skip stitches.
If the "finger" is in the wrong place, I've usually found that the machine doesn't sew well at all.
You say that the tension on top looks bad, but on the bottom it looks fine?
Which one is happening:
Does the top thread lie flat across the top? - Top tension too tight or bottom too loose.
Top thread in loops on the bottom? Top tension too loose or bottom too tight.
For a quick "fix", you can try to run dental floss between the tension disks and see if it pulls lint or small animals out.
ETA: This would help of the top tension is too loose despite having it cranked up to a really high number.
If that still doesn't do it, depending on what the answer to the question above is (or a photo would be equally great), I may have more suggestions.
Additionally, the dis-assembly instructions are in many (but not all strangely) of the featherweight owner's manuals
This one has it:
http://www.ismacs.net/singer_sewing_...ght-manual.pdf
Found here with a bunch of links to other important 221 manuals:
http://ismacs.net/free-sewing-machin...ls-list.html#S
This one can also demystify some of the tensioner adjustments and setup too:
http://www.tfsr.org/pub/technical_in...echanism_2.pdf