manicmike

This is one I know the answer to. When you lift up the presser foot, there is a small lever that pushes on the back of the tensioner and thus releases the thread.
Problem that you are both describing is one I experienced with several machines. One was because I removed the tensioner to clean it and when I put it back into the machine, I'd not put it quite as far in as it was before. The release bar was therefore not pushing on the back of the mechanism enough to release the thread. Solution was to loosen the screw once again and push it back a little further. It's exactly right when the presser bar is up and you're able to pull the thread out.
The other cause of the problem is that the release has been used and used and used with no lube and has worn down. Drop of tri-flow will stop the wear and you'll need to either replace the release bar (hard) or push the tensioner in a little further (easy).
A temporary solution is to hold the foot release up as you pull the thread out. This will release the tension. My current 66 has the problem and rather than mess with the tensioner, I always lift the foot release to get the thread out. Yes I am indeed incredibly lazy. Might get around to it some day.