It seems you bent or broke something in the needle lift mechanism, the needle(s), or the needle frame, probably because of a worn or mis-adjusted needle brake, or sticky or mis-adjusted plungerhead stop.
IIRC, all serial #"s had a shearpin in the needle lift link. HOPEFULLY that has sheared, there"s also a woodruff key connecting the needle lift arm or disk to the knotter shaft.
The needles cannot really get "out of time" with the knotters without something like that happening because the crank arm that lifts the needles is attached to the knotter shaft and they operate together.
That being said, I hope you have the operator"s Manual because going through the complete timing routine is a MUST at this point.
The knotter shaft is what gets timed to the plunger head travel.
Once you figure out what has broken or bent, check the "needle height adjustment".
Here"s what the book says about the "needle height" adjustment...
The needle height is governed by turning the thread end of the needle lift rod.
The height of the needles may vary, but they should rise high enough to seat the twine firmly in the bottom of the twine disk groove and continue to raise for at least 1/2" after seating the twine.
Tighten locking nut after adjusting the needle lift link.
CAUTION: The needles should recede low enough so they are below the bottom of the baling chamber when the needle frame is in "home" position.
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