How to do a rolled hem on very fine fabric

3-thread rolled hem:

Remove left needle.
Settings as follows:
Upper looper 3-5
Lower looper 7-9
Right needle 3-5
Stitch length 1-1.5
Cutting width 3-5
Differential N

I don't know your model in particular but generally this is how you set up a serger/overlocker to create a rolled hem. Remove the left hand needle and thread if 4 threads are threaded). Now there is usually a lever around the stitching area that you slide back towards you to remove the stitching finger back (disengaged). Then you adjust the top looper tension looser (about 2-3) and lower looper tension tighter (7 or 8). Leave needle tension at normal tension (5). You may need to move the cutting blade to the right too. The technique is to cut the fabric wider but with a narrow stitch so the cut edge rolls under within the stitching. You want the top looper thread really loose so it rolls right around underneath up against the needle thread, the lower looper thread needs to be tight and almost invisible, pulling the upper looper thread down. I usually do a few test runs and check the stitching. Once happy, I turn the stitch length right down to 1 so it is very dense. This uses a lot of thread up.

Ideally use a wooly overlock thread on the upper looper as this "fluffs" out once stitched and "fills" in covering the fabric edge completely.
some good images here
Sewing Basics Narrow Rolled Hems with Serger Sew Mama Sew Outstanding...

May want to check out Troubleshooting section of the manual:

Instruction Manual Elna 654 Digital Copy Janome Sewing Centre Everton Park (beware, if this is the same flyer I've found elsewhere, it is not an instruction manual but rather just a leaflet...)

or contact Elna Support for assistance.

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I was told to oil the blade and clean it well and it will cut again.

Consult the owner's manual. It should have basic instructions for the settings. You may also need a presser foot for making a rolled hem.

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here is the Elna site, see if you can find your manual there.
http://www.elnausa.com/en-us/models_overlock.php

this sounds like an overlocker/serger machine you are using? if the fabric is catching on the overlocking tongue it could be a number of factors, have you lifted the top cutting blade out of the way and forgot to put it back into place? That would be my first thought, the top and bottom blade move against each other cutting the fabric. Rolled hemming usually requires the blade to be set on about 2, or middle of its setting range, the stitch finger is pulled back out of the stitching area, top looper thread is loosened off and bottom looper thread is tightened up, resulting in the top looper thread wrapping around the edge of the fabric and pulling the cut edge down under within the seam, forming the rolled hem.

You can not do a rolled hem on heavier material. It is only for thin cloth. You have to do a 3 thread narrow edge on heavier cloth.

Just trim the fabric to the desired hem length plus one inch, then overlock around this raw edge with thread close colour match to the fabric.

You then have the choice of either stitching around with a stretch stitch on your sewing machine, or hand sewing.

Being lycra shouldn't change how you hem them unless the trouser leg is extremely close fitting and the hem seam is going to be under tension.

My first choice would be using a twin needle in straight stitch from top side but this finish can pop/break if the hem is under tension. But perfect for most knit hems.

If you hand sew then you can turn up hem allowance and put a length of fusible hemming web inside the hem allowance and press it to hold. Then do a back stitch hand sew around to hold hem in place.

If you sew with the regular sewing machine, then use either the stretch stitch or a very small zig zag, and a ball point or stretch needle.

On ready to wear you would see a coverstitch hem but your overlocker doens't have this stitch.