First, which 4.3 do you have. Merc or VP? Second. When you pulled the O/D did you stress the lower shift cable? ...unlikely with a Merc Alpha II. But per BT Doctur if you didn't remove the lower shift cable from the shift plate before yanking the engine you may have ruined it.
Engine R&R shouldn't damage upper or lower shift cables if disconnected before the engine pull.
So determine if the upper or lower cable is bound. Easy check. Lower should slide easily with your fingers and actuate the bell hsg shift linkage. Upper should advance and retract easily from the shift controller. Make this check with both cables disconnected from the shift plate. Merc controller parts, like the Commander 3000's are essentially nonresistant. My '96 174 SEI controller is a Merc 3000. Generally known as a POS. ...can't believe mine is still working.
Maybe your controller gave it up apart from you engine work. If so, I say buy a new controller.
Edit..ps: The cable connecting nuts on the Merc shift plate (also VP I suspect) CAN NOT be fully tightened. They are nyloc nuts, and the cable end eyes (shift and throttle) must have 1/8" free play on the studs. My pal replaced his controller and wrenched these nuts tight. Everything was out of control, locked up. I showed him the manual's process and all was good.