It's a long time since I had a KS787 but I will offer a couple of suggestions.
First take the carriage off the machine and make sure it is thoroughly clean and oiled, then move the levers whilst holding it upside down so you can see what is happening.
Make sure all the buttons are cancelled; I think you do that by pulling them forward but I'm not sure now but your manual will tell you.
For punchcards, you can use any 24 st. card but for fair isle you need to punch out the background, instead of the pattern. Tuck and slip patterns are punched the same as for any other 24 st. machine.
Hope this helps and you get it working,