Needle must be in right. So the machine doesn't do zig zag? or could but doesn't do zig zag yet? The thread breaking can be from the tension not set right or a ton of other things. Is the thread flowing smoothly? Some times the newer threads don't go off the spool without a little hitch or something. There is a thread on here about someone else with a messed up tension -
http://www.quiltingboard.com/vintage...e-t218411.html a lot of good advice on there. When you thread it can you pull thread through easily with the presser foot up? down should have a bit of drag?