And now that I can look at both photos I see the 1207 should be set to straight stitch. I think the parts holding the right end of the long horizontal metal rod are where the stickiness is. You said you can push it to the left, but can you push it towards the back of the machine too?
Did you say it was making a blind hem stitch? I will look at your blind hem gear, because mine will not. (When I turn the blind hem knob to ON it goes to center homing straight stitch. Weird but useful.)