Hi Eileen,
Is the timing belt moving freely? Under the plastic covers at the back of the machine it turns round some large cogs. If the grease on these has hardened, you will have problems with patterning. You may need to clean off the old grease and apply some more.
As the machine is working OK when you select the needles by hand it suggests the carriage is working all right but it might be just as well to remove it from the needlebed and give it a good clean. Brush out all the old fibres and clean it with a small paintbrush and surgical spirit (not meths). Wipe it clean and re-apply oil to the needle channels on a cotton bud.
Also clean all the needle butts and give them a very light oil with the cotton bud.
Finally make sure your sponge bar is in good condition and replace it if the foam has become flattened.
Hope these suggestions help.
Regards,
Sue, January 2012