Yes, the needle is up. I did find that manual but have been having trouble finding how to disassemble the race. I'll keep reading. I think I'll take it to the local sewing machine repair to see what they say if I run into problems taking out the race assembly. Also going to check to make sure the needle in the machine is the proper type. The machine is clean so don't think lint or thread is the problem.
Thanks everyone for the suggestions.