The needle position not aligning could be because your machine needs a good clean and oiling. I’m not sure if your model have a button hole function. Make sure it is not engaged. Sometimes the shaft where the reverse unit turns in get sticky and does not return with your button hole dial. You will have to oil and warm it up with a hair dryer or use a special release oil. You will get access to it by removing the side cover. It can take a while to work in the fresh oil.
Husqvarna 2000 service and repair