Hey Joe,
Thanks for this. I looked at that TU lever again last night and it didn't seem as bad. I suspect something in there is stripped.
Just to be clear, was Rusty looping first then binding the hook or not letting go of the thread first then causing the nest? I completely understand the looping from too much thread hanging out down there causing problems. I can't figure out why it would choose not to bother coming off the hook. Maybe the thread is too tight? It looks and feels fairly tight around the bobbin case too. That said, there's a "loop" near the TU lever when this all happens. More than I'd suspect there should be.
I've seen this problem once before and for the life of me I can't remember what the solution was.
I'm thinking that Caroline is right, it's time to put an end to this pain. If it won't hold settings, I can't guarantee it will hold together.