It looks like a tension problem....

Birdnesting. I've had this prob before. For me it was fixed by adjusting a little screw in the bobbin case. Not sure if that's the fix for you. But here's a link on how to trouble shoot it.

Nel

Here is a link that might be useful: Birdnesting

annie and nel, thanks so much for your comments. i used pins to give it a bit more tension, and it got better. thankfully, i don't mind so much if it looks a little messy, because this will all be hidden from view. i just want to make sure it's strong enough.

i'll try changing the tension in the bobbin case if the problem continues.

you are probably using the wrong needle. There are needled for woven and needles for Knits.
Elastic sews in best if you used needles for Knits... the needle makes a big difference