Usually when I play in the middle octave, I get a good, clear note without any cracking. However since my lip is usually covering almost all of the hole my teacher told me to start setting my head joint where I can just feel it touch my bottom lip, so that more of the hole is uncovered. When I play like that, I find that I can hear the lower octave of whatever note I'm playing. I've tried increasing my air speed but that just makes it crack up and I've also tried aiming my air upwards, but that just makes the tone breathy. I can't get a hold of him right now and since I'm in a different country than usual my next lesson is in about two weeks, what can I do to get a clear sound out?

Well I would aim my air down if I were you. Sometimes that happens to me too. I would also check the pads on the flute. My old flute has a few broken pads, and it makes a few notes in the middle octave crack. It could also just be that you're not used to the correct embouchure. You might just need some practice.

Two suggestions from a beginner: (1) Push your lips out. (2) Rotate the flute back to where it used to be when you could play the 2nd octave notes, then approach by small degrees the new embouchure your teacher wants.

Start trying to use different muscles in your lips.