It is quite possible it IS the needle, especially if this is a very fine-weave (high quality, high thread count) fabric. The needle can hit *on* a thread rather than poking *between* 'em, and sort of 'bounce' enough to drop the stitch. Try a thinner sharper needle and see if that helps.
Oh, it would also be worth trying adjusting the top AND BOTTOM tensions.
Sometimes though I've had the problem you describe, on fabrics that I'd sewn previously with no problem, and while I never did figure out exactly waht precisely the problem was, it was solved by doing a complete tune-up on my machine (disassemble, clean, appropriately lubricate, reassemble, and realign all user-serviceable parts). You can do this yourself, or the last time I had a repair guy work on the machine (cuz my own tune-up didn't fix the problem) I beleive it was like thirty bucks, which isn't too bad (mind you, this was like 10 yrs ago in W NY, no idea what current or nationwide rates are like)
Ldychef2k, have you disassembled yours to check that it is not just a snarl in the thread underneath the throat plate? That is nearly always what produces the jamming you describe. Unscrew the thumbscrew that holds the needle in; remove the needle from its socket (it will still be threaded onto the thread, which is fine), see if you can jiggle it loose by hand; if necessary, open up the access hatch to get to where the bobbin is, and remove the bobbin case and bobbin. Chances are very good that somewhere in all there, you will find a big mangle of thread snarled around that hook thingie and the needle and the bobbin. Cut it out, reassemble everything and rethread (don't forget to put the needle back in its socket) and you SHOULD be good to go.
Good luck,
Pat
