I'm going to keep looking at the knob. I cannot push that pin forward and move it. It's all one assembly. The knob you turn and the numbered dial seem to be behaving as if they are all one piece. I am starting to believe this is a temporary fix as sometimes it still snarls up underneath.
So I am using white in the top thread and red/blue verigated in the bobbin thread and now that I can really see what's happening, it looks a bit off still. It's no longer impossible to remove the fabric from the machine when the presser foot is up. I can see small dots of bobbin thread on the top stitching. Periodically, there is a little white loop underneath like a stitch was missed but the thread is underneath instead of up top.
I really do not want to take the tension assembly apart. Looking at the numbered dial compared to other machines online as well as in the instruction manual, it looks like whoever put the knob on, because moms' machine didn't come with one, that was added later, put the stupid thing on upside down. The numbers are completely in a different place than any other machine I've seen. I'll take some yet more pictures and post them as soon as I can either this afternoon or tomorrow afternoon.
I spoke to my aunt who has the tan one. There are two machines. My mother had one and my aunt had the other one. My aunt still has hers, though hasn't used it in forever so hoping she lets me have it so I can refurbish that one too. Anyway, I talked to her. Her machine came with a numbered knob and mom's didn't. She remembers mom taking hers back to the singer shop to have it put on circa 1967 or 68. I have my dial set to 7 to get any stitching to work on it...well between 7 and 8.