Re: 1988 Evinrude 8 hp shifter
I have the 1990 motor version...and an OEM manual. Everything looks the same as yours.
I will quote the 3 lines of d/assy instructions:
1) remove the 2 gearcase head screws.
2) Tap lightly on the ears of the gearcase using a wooden dowel and mallet until the gearcase head has rotated 10? or 15? deg in either direction.
3)Remove the propeller shaft assembly from the gearcase.
Since you are presumably past 1) and 2) and are stuck at 3) there is not much extra help in 3)../.

If/when I have to do this with/to my motor, after saying all the appropriate 4, 5 and even 11 letter words, I'd just use a soft face dead-blow hammer and gradually increasing brute force; I don't think that you have any option, and that is what a shop would do, I am pretty sure.
There should not be any risk of further damage if you are careful and don't use too big a hammer.
My interpretation of the drawing is that there has to be a problem with #12 for the balls to have come loose (not cheap)..and the shift cam looks like the weak link, so you will probably be replacing that as well.
Hopefully the bore in the prop shaft is OK because they aren't cheap either.
BTW, there are supposed to be 4 of those drive balls, so if you don't have all 4, the remainder may be jammed between the prop shaft bore and the dog and that is what is causing the binding.