It certainly can.  What diameter are your blades?  If below 17.4", they are shot.  If they have less than half the original bevel (look at a new one), they are shot.

Middle hole is used almost always.  With good blades, and seeding alfalfa or similar (very shallow), the bottom hole is better but not many people bother to change them unless they have loads of acres to do.  Top hole is only used if blades are worn out and you insist on continuing to run them.