>>As an experiment, try using only the left needle and feed the right thread to its guide hole.
I did that and I isolated the problem to the left hook which simply untwists the thread. I also checked for burrs everywhere.
However per Constabulary's mention of the thread lubricator, I found a piece of foam, cut it and and pushed it into the holder and lubed it with sewing machine oil and put the threads behind the foam.
I also re-threaded the machine per the video, which is how it was threaded when I got the machine. I had cleaned the tension mechanism when I took it all apart looking for burrs. Nothing was found but there was a lot of dirt/gunk in the disks.
Now the tension system seems to be much smoother than when I first got the machine. The gunk must have been affecting the tension mechanism.
Now everything is different. The left hook is still untwisting the thread. Yet the machine runs ok now, even at high speed, and the stitches look good. So I think the only way to get rid of the untwisting is to use the right hand twist thread as was mentioned at the beginning of this message thread. However it is really nice that I can now run regular left hand twist thread and the machine will function! :-) The fact that the thread is untwisted somewhat is not great, but its not very noticeable in the finished stitches. Still, I think having a right hand twist thread in the left needle would be better. I have a pound of V138 right hand twist, on its way.
With the thread lubricator/guide in place, the thread is apparently under better control between the takeup arm and the thread guides at the needle bar.
I wonder how long my "foam" lubricator block will last. I used a small piece of foam carpet padding as the donor material for the lubricator block. I think it is polyurethane foam.
I added a pict of the current machine threading and the results of my latest test run. The unraveling of the left thread is not obvious in the picture since the takeup arm is up all the ways so the threads are under some tension.
The test run is about 24 feet of stitching. About half of it at full speed, which I think is about 2300 spm. There are some double stitches in there as I was testing the reverse as well.
Anyway, I am going to consider this problem solved for now. I'll let you know how the right hand twist thread does when I get it.
I think the key fix was the lubricator/thread guide, which keeps the threads under better control.
I'm always amazed at how much a little, seeming insignificant change like this can really make a huge difference on a sewing machine.
Thanks for the help everyone!