Nobody hit on this so I will express some ideas....assuming that you are already aware of a lot of this but......
The position of the "clutch dog" on the prop shaft is what determines the gear and amount of engagement as it pertains to gear selection. The dog is positioned by pressure on a spring contained within the prop shaft, with pressure on the "cam follower" on the front tip of the prop shaft determining the position of the dog.
Assuming the PS components are all installed as they were designed....cam follower, spring, balls, dog, pin, retaining spring, and the springs action still meets spec, and assuming that the teeth on the dog and on the rear of F Gear and front of R Gear are still in a serviceable condition, the problem lies within the Cam attached to the splined shift rod at the front of the LU.
Testing for proper functioning is first made at the shifter stub with the LU assembled and ready for installation into the mid section. Proper operation requires that the cam follower on the prop shaft be able to access the 3 distinct " detents" in the shifter "cam", and assuming that the LU casting into which the shifter stub is mounted is not worn out.
Any time the shifter rod is turned in the R direction, as it is turned, the prop shaft has to be rotated so that the vertical sided cogs of the dog and slots in the front of R gear align and engage. You cannot fully go to R if the alignment isn't accomplished and trying to force shift into R (when the engine is fully assembled) leads to bent/broken shift linkages.
So, first is the question: With the LU out of the engine, can you shift through all 3 gears effectively? If so, move on to shift linkage within the remainder of the engine.
One common problem in reassembly of the LU to the mid section is that the position of the shifter cam in the LU has to be in the same gear as the remote control, or shifter on the engine if tiller steered. If one is in N the other has to be also. Otherwise peculiar shifting attempts will be realized.
