The ring is not securely fastened. For regularly-shaped rings, take note of the width of the ring and use the appropriate self-centering jaw. Use the red self-centering jaw for narrower rings and the blue one for wider rings. Ensure that the ring is securely fastened by using the chucking knob.
For PJEM, check that the ratio setting on the pantograph arm and vertical carriage is properly set.
The letters are distorted due to excessive pressure exerted on the level. Do not push the level all the way down, as the engraving diamond will sink too deeply into the metal surface during engraving.
As a rule of thumb, push the level down lightly until it reaches a point where the level comes to a stop. At this point, the engraving diamond is at the surface of the ring. Exert slightly more pressure and start engraving. Practice makes perfect!