OMC poped out of gear. now no for or REV

i have a 1980 bluewater with and OMC 800 drive. we just put the engine back in after sitting a year, (took out becase of broken starter bolt) anyway wewere fine turing the engine and had the idel up high to keep it from dying, then i was driving the boat arond for about 10 mins and it poped out of gear. and now it wont go forward or REV. got it home and started it now it makes and chattering noise which sounds like tyhe upper outdrive, but it will stop for a few seconds when i rev the eninge.... so any guesses?? im just looking for somewhere to start. thanks!

check the ball gears first, then on to the vertical water pump shaft in the outdrive I suppose. doesn't sound like a prop issue if there is a noise at the drive.

what do I look for the ball gears they look fine to me. are they supposed to turn right when you start the motor even in neutral.