Your hook timing is OK,you need to adjust your feed timing,when the needlebar is all the way down & you push the stitch length up & down the needle shouldn't move front to back.So you need to turn the cam(with the forked rod on it on the left w/2 allens on the cam) on the top shaft one way or the other(just alittle @ a time) (when the needlebar is all the way down) until it stops moving front to back.
Here's what we do to everyone we sell,unbolt the arm & lengthen it out & weld it so it looks like this.It also helps to oil the pivot points of both arms too.
The #207 takes a lot of upper tension to pull the knot into the leather for a nice looking stitch that's why the next size smaller thread in the bobbin makes it look better.On the larger machines like the CB3200,3500,4500 with the shuttle system & 2-upper tensions works better w/larger thread top & bottom as long as your leather is thick enough for it.
Sight unseen is hard to price,condition of the table ,if the machine sews or not,so with that in mind from $150.00 - $450.00,try FB marketplace or Craiglist.
Yeah,alot of times it hides in there,if you leave the hook in there & just take out the 2-little screws on the ring that hold the bobbincase in it might prevent you from taking the whole hook out.
These old Landis #1 are great for heavy & thick material because the only needle made anymore is a size #26 for #346 thread.The needlebar is not adjustable so the only other needle that would work would have to be a longer one you could shorten.If I remember correctly it's around 3" long.Parts for it will be hard to find too.If you do buy it I know where you can order needles from.
Might just be thread jammed in the hook,put some oil all the way around the outside of the bobbincase & spin the shaft back & forth & it should free up.