Thank you to all that commented on my question. Since my machine is sewing ok on other projects I have come to the conclusion that it is the design itself and not my machine or my choice of materials. This is a single design and not an expensive one so I wont feel bad about deleting it from my collection.
I would acknowledge that the design has a problem and slow down the machine if you really want the stitchout.
Yes...a poorly digitized design can cause problems...do you have other designs from this designer that stitch out well? Is this part of a collection of mug rugs and this is the only one that gives you a problem? Do you have software that will allow you to simulate the stitch-out of the design? If so, you might be able to see the problem stitches in the area of the design where the problems occur. If you have tried all the other "standard fixes" for problems, I would contact the digitizer. Take a photo of the problem area while it is in the hoop...it may help the digitizer see what may be happening. Sometimes there can be a problem when the digitizer converts the design from the native format into the various machine formats...a glitch could occur...or there may be some random small stitches within the part of the design that did not digitize well.
Have you tried using the same thread etc with a different mug rug or coaster design, with a similar number of stitches, perhaps from a different vendor?
If you have tried what Rescuer has mentioned, I would be contacting the owner/digitizer of where you bought it. Maybe they have an idea on what to do.
I'm with Rescuer, I find when I get problems it's when the area is too dense. Love Chris
My guess, certain parts are too dense. I am sure you have tried changing the needle already, but it might be good to change thread. Some of my black thread spools will break -- often!
I've tried changing the needle, the thread and the bobbin and the problem continues. The design is not dense, in fact quite the opposite. I have tried several spools of thread for this part of the design and the thread shreds and breaks but yet I can use the same spool on another part of the design without that problem. It is quite frustrating. I know what you mean about black, if at all possible I avoid black and use a dark grey instead. I sewed professionally for many years and found black to always be a problem. I think the dye weakens the thread.