how do you know if cables are adjusted correctly?
Have you removed short shift cable from shift bracket and can you get reverse every time when pulling cable? Pull for reverse and push for forward.
If that works then maybe cable adjustment might be needed. I would try his first! If cable needs adjustment post back and I can post how.
Also pay close attention to the bell crank (as I call it) the wheel. make sure it is all there and it spins, Item 22.
Also look closely at the "shift fork" on the end of the short cable which moves the bell crank. pull it out as far as you can, gently (with engine side of cable disconnected from shift bracket) and see if there is a lot of muck deposited behind it. If too much muck is there the shift fork will not go deep enough to engage reverse every time. If this is the case it must be cleaned as the muck is inside the hole of the shift fork which you cant see unless you disassemble the shift cable. This might be tough to figure out so it may be a last place to look. But if there is a lot of muck around the cable nut behind shift fork that is a good sign this may be the issue.
Other area of concern if everything else is good is explained below.
Look at link of parts break down, I have seen this a couple of times on the Gen II's
The bushing Item 5 has moved UP in the bell housing about 1/8 inch. If this happens the vertical shift shaft also moves up and reverse does not get made every time you shift. You can see if you look closely, there will be a slight color change in the bushing outside diameter. It will be lighter in color as it has not been exposed to the exhaust as long as the rest of the bushing.
If this is the case the shift shaft item 25 must be removed and the bushing gently tapped back down. BUT NOT TO FAR!! It has to be at the right height or it will cause an interference fit with the outdrive shift shaft.
then reassemble the shift shaft. Make note of the orientation of the (item 25) U shaped bottom so you assemble it back oriented correctly. You can do it 180* out.
http://www.marineengine.com/parts/m...11995/0d469859-thru-0f679999-usa/bell-housing