Depending on how you do the adjustment, you can actually affect how tight it is, or just the position of the numbers. push the numbered ring in and turn the numbers - adjust the numbering. Push the numbered ring in and turn the silver knob, adjust the tension as a whole.
The numbers on the dial are pretty much arbitrary.
Considering how tight the tension is (7 - 8 is way too tight, assuming a properly adjusted tension mechanism - it should be between 3 and 5 typically), the other reason for nests is a burr somewhere that's not letting go of the thread at the right time. A missed stitch, should only look like a long stitch.
How does the slack thread take-up spring look? if it's mangled or broken, it might be causing the issue, especially if it were to stick in the up position, or be assembled so it stays too high to do its job.
If you're still getting pokies of bobbin thread at the top, you still have room to lower the upper tension.
Can I convince you to step through this blog post?
http://www.archaicarcane.com/fragile...-equal-stress/