Re: gear selecting
You bumped the shift shaft on the lower unit so it is not 'timed' to the rest of the linkage.
Drop the lower again, turn the splined shift shaft to Reverse, you will feel the indentations in the shift cam at Neutral and another at Reverse. Either position will work as long as you have the control handle in the same position.
If using Neutral you will have to reach up and turn the flywheel to get the the LU up again. Be SURE to pull the spark plug wires to make double sure that the motor cannot fire with your hand on the flywheel.