Well...
I took off the foot and looked at the needle and the hole. It doesn't touch anywhere, but (<<this is a very big but) - the hole has been gouged out in several directions and is probably twice the size it should be. (Remember that broken needle it came with?) The plate may be a replacement, because the metal looks different and it doesn't fit perfectly like the other two. Hmmmm.
I will look for another plate in addition to the lower tension screw. If it is the presser bar or other mis-alignment, what next? This is the oldest machine I have so far, and my first pre-1900.
K