Where do the mirrors go in a telescope

Is this a reflective telescope? You need to make sure a couple things. Make sure the small mirror is still in place. Usually the eyepiece can be pulled gently out. Make sure no packing material is on the inside of the eye piece.

The image is also UPSIDE DOWN -- all astronomical telescopes show inverted images --- it is normal. No up or down in space.

Light simply enters the tube hits the mirror on the back and bounces up and hits the smaller mirror under the focuser. That's all there is to it.

You are NOT turning the focus knob far enough to achieve focus. Practice during the day time on a distant object.

Yes, it is probably way out of collimation with the main mirror actually tilted -- watch this video;

http://www.andysshotglass.com/Collimating.html

It is NOT in focus. Practice focusing on a distant object during the day time.

This is a reflector style telescope. The MIRROR is in the base! Light enters the front near the focuser and goes down the tube and bounces off the mirror and back to the front and through the eyepiece. The EYEPIECE end is pointed up.

Your scope TUBE should look like the reflector telescope on this web page:

http://www.amazon.com/Edu-Science-Astro-Nova-102-Telescope/dp/B001NLOQN2

Wish you had NOT bought this telescope. For about the same price you could have bought this:
http://www.telescope.com/control/product/~category_id=classicdobs/~pcategory=dobsonians/~product_id=08942

The scope above has a 6 inch mirror which is almost twice the size of the scope you bought.

It will work without the diagonal (maybe) if you have enough focus range BUT it must have an eyepiece. Measure the hole. It's eithe .965 or 1.25 inch-- you can buy eyepieces at many online retailers. Here is one:

http://stores.shop.ebay.com/Agena-AstroProducts__W0QQ_armrsZ1

Remove the eyepiece, and look down the focuser tube. The small diagonal mirror should have the full main mirror visible. If not, then adjust the diagonal mirror until all the main mirror is viaible, and the diagonal is centered. Then the main mirror is aligned until all the images viewed are concentric, with your eye being in the middle. That should do it.

Not worth fixing-- next time you buy a telescope look at a small Dobsonian like this one--

http://www.telescope.com/control/product/~category_id=dobsonians/~pcategory=telescopes/~product_id=09804

or the 6 inch version of the same scope--

Start by adjusting the focus draw tube all the way in, then back a little bit. In the day time indoors, remove the lens from the draw tube. Look into to the draw tube. You should be able to see your eye centered in the mirror. If you cannot see your eye at all, either the primary is tipped drastically or the secondary mirror is way out of adjustment. In that event I would return this scope to where you got it.