I tested what was suggested and found....
1. if the handwheel is not locked, it runs freely, like for the bobbin winder.. AND the pedal works freely to control the speed. AND the needle does NOT move up and down.
2. if the handwheel is locked and I move the handwheel, the needle goes up and down. The handwheel is a little stiff but it moves the needle up and down
3. BUT when I use the pedal, the handwheel will NOT move even when I tried to start the movement by rotating the handwheel counterclockwise the pedaling. And the belt starts slipping. It doesn't do that when the handwheel is not locked.
I oiled the handwheel. I oiled every hole I found. What am I missing? The belt i got is the leather belt that is 3/16. It seems to work fine with handwheel unlocked for the bobbin winder and moves that perfectly. But once I lock to sew and the needle moves with the handwheel, the pedal and the belt won't coordinate. Could it be that my handwheel is too stiff? I dont know how it should feel (as loose as when it is unlocked??).