When you did the adjusting per the manual, did you change the stitch length lever, the up and down one on the right front? In your first photo, it looks like it is set just a hair above Fine (not sure what that says), which might have it set for stitching in place, like tacking a thread. I would set it down in the 10 or 12 area. It is likey that every person who passed by that machine had a go at twisting or turning anything that would move. In the machines I see in thrift stores, 9 out of 10 with the internal bobbin winder have it engaged.