Change the Black Plague to a pandemic that kills sheep instead of humans.
Labor remains overabundant, and the need for labor-saving machinery
(particularly in textile manufacture) is eliminated.
I think you are on track. Yet another easy way to make labor overabundant, and labor-saving machinery not economically efficient investments would be the continuation of bound labor in Europe for another few centuries. Serfdom and other forms of slavery greatly reduces the incentive for investors to invest in any sort of labor-saving equipment, making the "best" investments land and people (in Russia nobles would often determine their wealth by the number of souls they owned!)
Eliminating the black death would probably push back the collapse of serfdom in Western Europe, but that is not the only way to extend the life of that form of slavery. Serfdom was imposed in Eastern Europe in many areas (Poland, Prussia, Russia) in the 15th and 16th centuries, well after it was in decline in the West. A catastrophic decrease in international trade in the West (maybe the Ottomans take full control of the Med.and no discovery of the New World) could make very well make serfdom economically viable in Western Europe around the same time it was becoming so in Eastern Europe.
I would argue that the persistence of slavery hindered the advance of industrialization in the Arab world (along with the destructive Mongol invasions), I don't think there is any reason it could not have done so in the West. There were, after all, no shortage of bright and inquiring minds in the Middle East during the Islamic Golden Age, with the spirit of empiricism that was behind the European Scientific revolution.