Power tilt/ lock out

Hello, all I have acquired my first boat a 1976 Glastron T179 with a aq130c and a 270 outdrive. My question is: When should the outdrive be locked vs unlocked. The prior owner has the pin in the hole closest to the hull. On land I can't seem to get it to lock ever. when in the water going into reverse the outdrive lifts up. If I can get some direction to where a post I can read answers or get and answer on this that would be great. Thanks!

Two different issues here...

1) which pin hole... usually the middle pin but regardless, use the pin hole that results in the prop shaft being most parallel to the bottom of the hull. Choosing wrong pin hole has NOTHING to do with "kick up" in reverse but can adversely impact how the boat "runs".

2) reverse kick up...A number of things can cause this.
a) Prop rotation setup done incorrectly... ( see below) Sometimes ignorant mechanics incorrectly adjust for prop rotation ( RH vs LH) at the throttle/shift control at the helm.
b) Refer to OEM shop manual for correct adjustment of the reverse interlock. I can send you a copy of the 280 drive manual which has the same adjustment procedure.
c) Worn latches # 50 and # 52 on intermediate housing diagram below. Usually, the drive is split to replace these, however, I did once replace these two parts while the drive was intact and still mounted on the boat "on the hard".
It's EASY in concept, however, not fun in execution.

View attachment intermediate housing 280.pdf

Thank you for the advice I have looked at the latches and springs they look to be in working order. I moved the pin to the middle hole the outdrive now will lock down when in neutral. It doesn't take much to pull it up by hand though. With moving the pin to the middle hole the outdrive transportation bracket now wont fit into place. I'm guessing some one in the 45 years the boat has been around lost the original and replaced it with on that was close... Going to check my local marine shop to see if it is something I can order. Better to get the right one. I am going to put the boat in the water tomorrow to test it out to see if the lockout is working correctly.

When set up correctly, it is very very difficult to lift the drive by hand when in neutral... you have to reach up under the drive and manually release the lock latch.

I usually just tie my drive up to the stern cleats when towing, however towed only about 5 to 10 miles at speeds under 60 on good roads.

Re: order trans bracket order... you'll do better off on ebay.

Re: inspection of latch.... the amount of wear that will disable reverse interlock is almost impossible
to detect visually unless you side by side compare with a brand new one. Usually, one sets it up per instructions in shop manual and if it still kicks up in reverse when correctly adjusted.... its a worn latch.

Is there a YouTube video or diagram I should look at to see the adjustment? I don't have the original owners manual.

PM me your email and I send you a pdf of the 280 OEM drive manual... adjustment is the same on your drive.