Thanks for confirming. I have not seen that pointer up close. It doesn't look as though it can easily be replaced with something else, which is the essence of some of the suggestions below (Well, anything is possible with one's trusty drill, screws, bolts, double-sided tape etc!)
First step is to try and get it working as it should. Is the manual's guidance on setting up and using the Star finder clear enough?
Red dot finders are pretty good - some things are better than a finderscope (a small refracting telescope of 6 or 8 magnification), some things are worse. It's a matter of preference. Certainly they are good at getting a bright (naked eye) object into the field of view of your widest field eyepiece (the 20mm in your case). And as you come to know the sky and look at star charts, you can also point the scope at where something fainter should be and get it into your field of view (Eg. point you scope "half way between that bright star and that other bright star and up a bit and to the left". It can be done.
Yes, you should really have you head closer to it. Right down behind the scope is a bit to far in my view. If the finder was on top of the OTA (it moves as the OTA rotates as you point to different parts of the sky - see
http://www.iceinspace.com.au/forum/s...900#post506900 ), having your head on its side in the upper half of the OTA - just above the upper ring?