Sounds like you've tried just about everything. Fairy Frost has a different texture than regular cottons. Sometimes bumping the needle position one bump to the left or right can correct a slightly off timing setting. Sometimes it's the "needle/hook distance that creates the skipped stitch problem. If you put the needle in the far left position, turn the handwheel counter clockwise, and stop when the needle is on the way up, and the point of the hook comes right behind it at the top of the eye of the needle. Then check how big the space is between the needle and the hook. They should be so close, they're almost touching. If you've got a big gap between the needle and hook, you need to close the gap, and that will usually clear up those skipped stitches. You probably want to take it to the repair shop for that adjustment.
I've found that polyester thread behaves better than cotton for free-motion. I think it's because poly has a little stretch to it, but cotton doesn't.