So it rained all day yesterday so I dove back into it. I've determined it has to be something within the bobbin case area causing the upper thread to hang up causing it to get pulled deep into the upper tension disc.
With evidence on the hardware I can see someone has been in here. I think the needle shaft needs adjusting, looks like it goes way too low. I couldn't find in any of my files or online the spec for it so I eye-balled it and tweaked the hook timing.
It's way better but I'm still hearing and can feel a hang up. I checked for burrs. The bobbin case seems to be sloppy where it sits.
There is a plate next to the bobbin case that the tread must slip between. What's the adjustment on that? I've ordered a new bobbin case.