As for the needle threader, I have a Babylock, and it actually states in the book that the threader works best with the needle in its highest point. And you know what, that book is right : ). And honestly my needle threader is very important, like a make it or break it type thing. If mine was not working, I would be having it fixed. These machines are not cheap by any means and they should work the way they are supposed to. So I suggest talking to the dealer where you bought it, and see if they know of any tricks, or take it in and have it repaired.
And if you were at a Janome store trading up for another Janome, you would be offered so much more in trade it. I think I would have laughed at $500 .... !!!
Best of luck...