I have this exact serger. I love it and have never had any problems with it. Did you try to rethread it? If so there is a particular order it must be threaded in. Is the blade cutting at all?
After you sew the fabric right sides together is it attached at all? If they are, but you can pull them apart and see the threads from the right side it really sounds like a tension issue, especially with the two needle threads. Set all the tension dials to 3. serge some. Adjust each dial individually just a bit and serge some more. Most of the time my needle tensions are set at about 3 and my upper and lower loopers are at about 4/5 or 5/6 respectively. Also open up your covers and have a look. Make sure the red lever before the throat plate is set to 'S' for serging and not to 'R'for rolled hems.
If you cant figure it out take some pics of it and Ill try to help you. Open up the covers and take a pic from the front, the right side. Please make sure that they are clear so I can see what you have things set at. email me at firstname.lastname@example.org
If you want I can even take pics of my machine and how I have it set up. I cant do this until tonight when I get home from the lab.
Also the manual sucks for this machine. I highly reccommend Singers Sewing with a Serger.