Mannem, have you tried re-threading the top? Seems to me the thread hasn't settled through the tension discs properly, or there's a bit of fluff caught in there somewhere. Lower the presser foot and gently pull the thread, if it pulls through the needle easily, it has missed the tension.
I had this problem with my machine, with a flashlight and really close examination I found a short piece of thread had doubled and was caught in my tension disc, after removing everything worked fine. good Luck.