Take all the thread off the machine, one more time (yes, I know, but trust me on this one). Rethread from scratch, manual in hand, and read out each step before you do it. This time, make sure you thread the top of the machine with the presser foot up -- that opens the tension disks and allows the thread to enter.
Loops of thread on the bottom = insufficient tension on top.
Next, turn to the section in the manual on threading, and rethread the machine from scratch. This time, though, MAKE SURE THE PRESSER FOOT IS UP WHEN THREADING THE TOP. The presser foot has a linkage to the tension disks, and the tension disks are closed when the presser foot is down. It needs to be up when threading, or the thread never gets into the tension disks, and then you get thread loops when you try to sew.
Raise the bobbin thread, and pull the bobbin and top thread ends together under and behind the presser foot.
While you're at it, if your machine doesn't have a needle up/down control, put a piece of paper under the presser foot, drop the presser foot, and turn the handwheel. You're looking for the direction that causes the paper to feed from the front to the back of the machine. Stick a piece of tape or post-it near the handwheel to remind you which way it feeds front to back.
OK, now you've threaded with the presser foot up. Here's how you're going to start the seam:
1) Place the fabric under the raised presser foot.
2) Use the needle up/down control or the handwheel to drop the needle into the fabric,
3) Drop the presser foot.
4) Hold the top and bobbin thread ends together behind the presser foot and take the first couple of stitches,
5) Now you can drop the thread ends and sew normally.
I made up some samples of how my very well behaved sewing machine acted with just minor misthreadings. The photos are in pairs, first the top of the fabric, and then the bottom of the fabric. The top of the machine is threaded in blue thread, the bobbin has red. You can see what the results are like with sub-optimal threading and seam-starting procedures: http://www.picturetrail.com/sfx/album/view/22521551