When I am painting camo free-hand with my Iwata HP-C, there seems to be a lot of overspray and spitting. I think this may have something to do with the needle. Are there any other things which may cause this? I think I have thinned the paint enough. When I paint a broader line, there is no spitting at all.

Spitting is usually caused by the following either low air pressure, thick paint or clogged needle due to paint drying prematurely. Bent needles won't allow a fine line.