I stitched out this design with my D1, but it was several years ago. I put it on a cotton kitchen towel and used a couple of layers of tear away stabilizer. It is a dense design, but not overly so. The D1 definitely has a hooping sweet spot - not too tight, not too loose. My D1 is one of the older ones - it uses the floppy drive!
It looks to me like there is an alignment issue - did the embroidery arm get bumped or brush up against something?