Sounds like an alignment problem - something discussed on another post this week.
Start by putting your spur drive in the headstock and the 60deg cone live center in the tail stock. Extend the tailstock quill as far as it will go, and then bring the tailstock up so that the two points are close together. The two points should just touch each other, but it is possible, and even likely, that there will be some mismatch. These lathes come in two boxes, and you have to install the headstock onto the body of the lathe/bedways, and it is very common for the initial installation to not be properly aligned.
Look carefully at where they come together. If they are aligned vertically, but out of alignment horizontally, its an easy fix. Use the appropriate allen wrench that came with the lathe to loosen the four socket-head screws that attach the headstock to the bedways - loosen them just enough that you can gently rotate the headstock to align the point of the spur drive with the point of the live center, and then retighten the screws.
It is also possible for the misalignment to be in the vertical plane. That's the worst-case scenario and its harder to fix. If the point of the spur drive is too low, you can loosen the four screws as described above, add shims under the headstock, and then tighten them back down. However, if the point of the spur drive is too high, then the problem is with the machining. In that case, my suggestion would be to get on the phone with Penn State customer service (call them on the phone - that works far better than using e-mail) to discuss returning the lathe for a replacement.