Something is still off,
 

On the stuck-up rust bucket 127. Everything moves smoothly but the needle is not picking up the bobbin thread. The needle is in correctly according to the manual. I have the needlebar in what looks like the correct position but there doesn't seem to be any way for the two threads to connect.

Timing issues?
Rodney

Not sure. If someone could post a picture of the bobbin area with the needle down where its supposed to be I might be able to figure it out.

I'll be happy to in the morning. I'm ashamed to admit it but right now I have a bunch of junk stacked on top of mine plus I need to put a needle in it again, I robbed it for one of my other machines. I'll take whatever other pictures that might help too while I'm at it.
Rodney

Thank you. Morning will be soon enough. I'm just glad things are starting to move along after 8+ months of being stuck.

couple of things the groove the needle goes in at the bed, very clean

shuttle carrier is against the race tight to snug . loosen the screw under the bed and on the long arm, push the carrier to the race.

tip of the shuttle / hook is also against . if not it could be the wrong shuttle

shuttle has to be loose in the carrier..

eye of the needle just below the point / tip of the shuttle. if your needle has a scarf I like to set then half way on the scarf . these needle heights on long bobbin can be a lot father below the tip than on round bobbins, they have nothing to hit ..

and when doing this you have the thread from the bobbin laying on the bed, Do Not hold it tight . like you would a round bobbin machine. if you do it will not form the loop

How far down into the shaft is the needle point supposed to be. Mine is about 1/8" at lowest point.
The 127 only has 1 type of shuttle.

ok don't go by the needle point . use the eye of the needle and the scarf, right now mine is set at the top of the scarf, when the point of the shuttle in centered on the needle shaft..

side note, that puts the tip / point of the needle even with the very bottom ( a hair below) of that groove or bed body

do you have the thread guide on the needle bar in place ? That screw that hold the guide on is the upper stop for the needle

Yes I have that in place. I'm guessing I need to lower the needle bar down a bit.