I agree with you Safe. Mine becomes smooth at about 400 to 500 also. If the 2 inch pulley will make it run smooth at setting 4 the machine will be running as if it is on 2. (half speed). Also with the belt off mine does not surge at any speed. The 2 inch pulley will cut the load on the motor in half which may also help. Of course Dan is right. No one can sew everything at 200 rpms nor do I when I am sewing pleats or panels together but when it comes to assembling a seat cover you absolutely have to be able to start and stop the machine with accuracy in the tight spots. I know what my capabilities are as well as my limitations. I have been sewing my own stuff for about 13 years. I have done 3 street rods, several PU trucks. Up till now, I have always used Welt because neither I nor my machine was good enough to do a good top stitch. I am hoping to change that with this new (to me) Adler. I will keep you posted on how things work out.
When you get your motor back, let us know how it does.