"You say that the fluid is fin
"You say that the fluid is fine, meaning I assume that with the engine in the full up position, the reservoir is filled to overflowing which would be correct.
The check valve on the port side, standing in back of the engine facing it, is indeed one of the many check valves. There is a identical valve on the other side of that passageway. In back of that check valve you can see is a shuttle valve that travels back and forth depending on which mode the PTT is in.
That would be a starting point as in my experience thru the years, I have encountered that shuttle valve sticking a couple times. Examine that brass shuttle valve for scoring, chips, etc, anything that might cause it to stick.
There is also a rubber tipped Trim Down Relief Valve located under the oil pump. If that rubber tip becomes damaged or fails for any reason (something I've encountered quite often), the result would be the problem you're having.
I'll send you the hydraulic diagram via email.
When time permits, visit my store ) at:
http://stores.ebay.com/Evinrude-Johnson-Outboard-Parts-etc?refid=store"