Sounds like it has seized due to lack of TLC, cleaning, and oiling. Continued use of the motor when the machine is frozen can burn out the motor.
I have a Necchi Logica (Kenmore Sensorsew) and it was making a grinding noise, I bought new brushes, bought a technical repair manual for my machine. But, it needed a new motor, so if it is making a grinding noise, it is because the motor seized up and broke the pulley for the belt. No one would fix it because it was too old, I bought it new in 1988. Well, I kept watching on ebay and found a used motor, that was the answer. If, that is your case and you really love your machine be patient and find a motor, but just be sure that you don't spend more than it is worth. Sometimes, those "old girls" can be had for a reasonable price for the whole machine. I see on ebay, a few for sale at around $100 but shipping is $50 some dollars. They are heavy, and they were made in Italy, so kind of nostalgia.
SOURCE: How do I thread my necchi Lydia type 544 sewing machine
Threading guide - http://www.sewusa.com/Threading_Diagrams/Threading_Pages/Necchi_Sewing_Machine_Threading/Necchi_542_544_threading_Diagram.htm
Make sure the presser foot is up when threading any sewing machine.
SOURCE: Where to put the oil for a Necchi Lydia 3 sewing machine
Beldia 1306 - did you ever solve your sewing m/c problem. I have just resurrected my old Necchi and have the same problem, power but very sluggish operation of the needle, could be oil that is needed. Can you help?
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