Prism99, I believe that's just a stock photo. I have a similar model, and on mine there is no option for a vertical spool pin.

Otherwise I think you're spot on.

Also, again with the bobbin "tail". That's caused me an untold number of issues.

Sheesh. Stock photo, yes. Didn't even think of that!

Although everything you said about it was correct. You'd think they might have had someone in the room who knew how to work a sewing machine with the photo was taken!

Any possibility that you have the wrong BOBBIN? I know I have purchased machines with needles inserted backwards, wrong bobbin (L when it required M) and it just would not stitch past 1 or 2 stitches. Then the ah ha moment and tried a different tack. Maybe?

Here is a picture I just took without the cover. When I turn the hand wheel towards me, and the top thread goes down, it gets stuck in the bobbin case.

[ATTACH=CONFIG]378879[/ATTACH]

It's possible that the bobbin case has a snag or is broken...I know the machine you have and it is a nice starter machine.
You can remove the bobbin case by sliding the little black arm in the upper left corner of the bobbin case toward the white...lift out the case and run a finger around all the outside edges...if everything is smooth...put the case back in by putting your finger into the hole and floating it in the bobbin area. I must sit even and float...if on an angle, try again. Slide the metal arm back into place and try to thread again.
Good Luck. BTW, Needle goes in with the flat side of needle to the back.

I agree also with checking the bobbin to make sure it's the right one for the machine. To be sure, you probably need to purchase new bobbins that specify they are for this model. It can be impossible to tell one type of plastic bobbin from another type, because the differences can be very subtle (to us, not to the machines!).

When you pull both ends of the red thread it isn't catching the yellow? It is just jamming in there?

No, it isn't catching the yellow. It's just getting all jumbled up. It's the right bobbin. I'm using ones that it came with, that have worked before. I recently had it serviced and it worked after that. Just quit working, all of the sudden.

I had that problem when I bought a old Kenmore, yup needle threaded side to side instead of front to back. Sews great now. Had to reinsert needle with flat side facing the right of machine instead of in the back. Just a thought.