5.0 cobra stuck in reverse

Hi all again, i have a 1988 5.7l omc with a 5.0l cobra outdrive, went to go on first fishing trip this morning after previous sea trials etc to make sure everything was working as it should
Had an issue with the esa over stroke switch not working when first pulled off mooring(esa working fine, but would stay in "stumble" mode) then with shifting in and out of gear a few times this was then ok, I assume the overstroke microswitch is faulty so I will replace it
However, when we got into the lock I went to grab reverse(was only doing about 1-2 knots), heard a loud "clunk" then into forward and tried reverse again but it would not shift
Turned off engine and tried again but still stuck in reverse, tried cranking engine and moving shift lever to no avail
Could this be a shot outdrive or a repairable problem? boat is still in water and wont be lifted out until monday so i cant visually check anything at the moment
BTW it recently had a new shift cable fitted and adjusted according to all the info on this site, and was working fine on the 5 or 6 sea trials that we took her on
The gear oil was also changed at that time, and although I thought that there may have been water in the old oil(oil was brown in colour) I was advised that it was probably ok

Any advice or thoughts welcomed (even bad news!)

The loud "clunk" and now stuck in reverse is never good to hear.
If you like this boat, Sterndrive engineering sells a bell housing kit to adapt a Merc Alpha Gen 2 drive to the OMC transom assembly. I have done a few of these conversions and the work perfect.

Thanks for reply Chris, is this drive economically repairable, or should I wait until boat is out of water and remove & split leg to see extent of damage etc before making a decision
Also are the gears in the upper or lower section

You will need to remove the boat from the water to do any work on the drive. If you plan on keeping that drive system, I would look for a good used drive. It is easier and cheaper that finding individual parts.

have you checked the lower shift cable, thats the first place i would look as for all the landlocked boats that do skiing and tubing this is the complaint they come in with and it has usually been a lower cable

I checked the shift cable on the engine and its fine, the boat is coming out tomorrow so then i can check it on the sterndrive, i was hoping it would be a cable issue, but i suspect its probably more than that
I have had this drive off before but never split it, any tips on how to split it or is it straight forward enough( i do have a manual)
Also what am i looking for, damage wise, am i looking for lumps of metal etc?
Thanks for your advice up to now, will post my findings tomorrow evening
PS has anyone got a v8 outdrive for sale, i wouldnt mind the us shipping charges as long as the outdrive price was reasonable

So, it was driving the prop in reverse OK without noise? That's a good sign. Probably something like the shift rod, bell crank or some other linkage thing.

Yes it drove fine in forward without any noise/bangs or rattles
Whilst getting from the lock back to the marina with auxillary engine we started the inboard engine and went the rest of the way without any problems, just cant get reverse
Disconnected the shift cable at the esa linkage and had no movement what so ever with or without engine running
Will check everything tomorrow and probably be asking for more advice
Thanks again all

Just got back from boat and it looks like its good news (or at least better than expected)
Removed the*outdrive and bell crank etc*to find the outer cable had come away from the brass housing (dont know what its proper name is) which prevented any travel in cable
Manually engaged forward, neutral and reverse without any problems, it went in and out of gear easily*and prop spun freely without any noises/rattles when in neutral
When in gear (forward or reverse) the drive shaft turned when the prop was turned both ways*( ie turned prop C/wise and shaft turned, turned prop CC/wise and shaft turned) is this normal or should the prop have spun freely only one way when in gear?
Have just ordered new shift cable from USA for around £70 incl shipping, as opposed to £173 if I bought it from UK (good ole rip off Britain) even with import tax its still a good saving
Is the prop supposed to turn freely one way when in gear?
Also checked gear oil and it was good, same level and no water/metal shavings
Thanks all of you for your advice, will post back results when cable arrives

Anyone answer my prop question?