Hi,
I believe what you're encountering is the lower shift shaft stop/retainer pin not allowing the housing to slide up.
See item 32 in the link below labled "roller".
Although Honda calls it a "roller" leading one to think "roll pin"...(which is a common misnomer for spring pin)...
It is, in fact, a solid, stainless steel pin that is a real pain to get to AND push out of the very flexible shift shaft.
As a result, that pin is a major hindrance to replacing the shift shaft water seal.
In order to gain access to remove it, you must first remove the prop shaft with gear set.
While doing that is simple, removing (and replacing) that pin can be a real pain.
When I regularly worked on these Hondas, I actually made a "pin pusher" tool (which I have since lost) to deal with those pins.
Because, I found driving them out with the shaft still in the case very problematic due to the flex you encounter from the slender shift shaft.
But, I have had people tell me that they removed them with hammer and pin punch with no problems so ymmv.
Good luck.