I have no shift on my old (1972) Merc 4.0 horsepower. The lever moves through all three positions but the gear stays in nuetral. I dropped the lower unit and rotated the shift shaft with vice-grips. Same effect. When in the forward gear position I can push in the prop and get the forward gear to engage (the drive shaft rotates). However if turn the drive shaft, the prop does not rotate. I get nothing in neutral (as expected) and I get nothing in reverse. When I drained the lower unit, I got only water, so it may have been run with no lower unit oil for all of last season (1 hour max, it's on a sailboat).