So - I asked if the lady was a new knitter or if the machine used to work fine and it was just a new machine problem. Turns out, she's fairly new to knitting. Then I thought it over for a while and wrote a little list of things that might help. Readers, I'd appreciate your comments as you think of additional tips I didn't include.
Hmm. Ways to avoid dropping lace stitches:
1. Knit some waste yarn (two inches, maybe) before casting on and starting with the lace.
2. Try tightening tension. Doesn’t work? Try loosening tension. If too loose, big loops fall off. If too tight, stitches don’t slip off and onto needles well.
3. Make sure the upper tension unit take-up springs are not too saggy. You don’t want any edge loops.
4. Make sure the little brushes/wheels under the sinker plate (also called fabric presser, the silver thing attached to the carriage) are clean underneath. Those little wheels should spin freely, but if fuzzy stuff often gets under them, they don’t spin. That causes edge loops, which catch and cause dropped stitches.
5. Start with easy yarn. You’re looking for medium thickness that the machine knits effortlessly, probably acrylic with a little elasticity. Thin wool is also usually good. Avoid cotton, linen, bamboo, mohair, angora, spandex, slubs, kinks, bumps, super thin or thick yarn, at least until you're more expert. The thickness is “fingering weight” or a 2/12 kind of thickness. I have driven myself nearly crazy trying to machine knit “lace” weight yarn. It’s really a little too thin for the machine. I can do it, but I have to be really careful.
6. Start with easy stitch patterns, that is, the ones that do not require “full fashion” lace and just happen right as you knit without changing the carriage settings or unthreading. Why? Because full-fashion lace pulls the stitches farther and puts more strain on the fabric.
7. If dropped stitches are intermittent, you can put in a "lifeline," that is, sew a piece of thin string through all the stitches. You do this every inch or two. Then, if you drop stitches, you can go back to that. NOTE: I personally virtually NEVER use a lifeline, but other people swear by them. Why don’t I? I do big swatches and make sure my machine likes the yarn before I attempt the lace project.