Nice looking machine. I hope you get tensions straightened out. I have heard of people getting machines where the bobbin was tightened too much. In addition to WIChix's recommendation, I would make sure that the presser foot is raised before placing the thread through the tension discs. Then, according to one of the manuals I have, "The tension on the needle thread should only be regulated when the presser foot is down."
Do you have a manual for your machine? There are several free ones on the web.