Thanks Art....I appreciate your advice also.  I will keep it for future reference as I know so little about this machine. The needle was inserted correctly.  I will certainly use your advice on backstitching too. 
I spent this afternoon following WizCrafts printout and he was "spot on".  When I lowered the needle, it began to sew perfectly as well as backstitching.  I took the head off (which was a bit scary for me) but it was actually very easy, dropped the needle bar as suggested, and reinserted the needle to the proper position, and everything worked like a charm.  I did raise the check spring also.  Thank you again WizCraft.......I've been struggling with this machine for quite some time.  
As an aside....I did talk with Steve when I was first having difficulties and he walked me through the necessary corrections.  However, once I changed thread and needle size, I began to have problems again. 
Anyway.....thanks to you both...this board is awesome.