If you bought it at your LQS I would take it back and sew with it there so they can see the problem. They should be able to diagnose the problem for you and if they can't they should take it back. Let us know how it goes for you.

Interesting thought on the foot pedal. I don't have an extra one, but I can look to try and clean this one. Thank you.

That is my next step, bizzibe, I will make some time to do that in the next week or so. Thanks :)

I certainly would take it back.

I would take it back, if you buy a new machine it should work properly and certainly not have any problems sewing over a simple seam.