You might want to join the Bailey group on Yahoo:
https://groups.yahoo.com/neo/groups/...gmachines/info
What brand and *size* of needle are you using? Are you sure it is the correct one for the machine? Are you sure it was inserted as far as it will go? If it is not the correct needle or if it was not inserted all the way, it can slip out of place and hit against the foot or another part of the machine. You need to be careful, as a needle breaking can cause the timing of the machine to go out of whack.
I would make sure you are using the correct needle for the machine, that the needle is inserted correctly, and then I would rotate the hand wheel manually and slowly while watching to see what the needle is hitting.
Edit: If the upper tension is too tight and you are using a smaller needle (say, a needle used in a domestic machine), the upper thread can cause the needle tip to bend just enough that it hits the foot. Usually the smallest size needle you want to use on a frame setup is a size 14, and usually a 16 is better.