Re: 85hp Lower unit: Rebuild or replace?
Well, first off, if the gears and dogs are not worn, and the case is not cracked, there is no sense replacing the lower unit.
You simply have not assembled it correctly. The shift assembly on the prop shaft is so simple that not going into gear or not going into neutral is usually simple to fix.
Since you have not stated the engine year, I will describe early Force before Mercury changed them radically.
After draining the oil, the first thing you want to do is remove the water pump, then remove the plate it sits on. Now, you can see all the way down into the front of the bullet where the steel shift yoke is.
If you have not already done so, remove the bearing spool and the reverse gear bearing carrier. NOW, pull out the prop shaft and reverse gear. In the forward end of the prop shaft is the shift shaft. On the end of the shift shaft is a square groove into which fits a brass saddle shaped yoke. If the yoke is missing, it has fallen into the nose of the gearcase (which is what I suspect). Tilt the gearcase and shake until the yoke falls out either through the opening the pump cover seals or through the hole in the forward gear.
Now, after checking that the shift yoke is sitting on the screw in the side of the gearcase and pivots properly when you move the shift rod up and down, put a good dab of grease on the shift shaft groove and press the brass yoke into the groove. Push down all the way on the shift rod to move the shift yoke (this is the one the side screw holds in position) all the way forward in the gearcase and carefully insert the propshaft and brass yoke through the hole in the forward gear, engaging the grooves on either side of the steel shift yoke with the two tabs on the brass yoke
Without moving anything but the shift rod, now make sure the dog clutch slides forward and backward on the internal splined portion of the prop shaft between the gears.
Now simply reassemble everything and refill the gearcase with lower unit lube.
If you still want to exchange lower units, ANY lower unit that looks like yours will bolt up. They all had the same bolt pattern until Mercury put a Merc midleg and lower unit on the Force line. You did not state the years of the engines so I must use generalities.
HOWEVER: You must take a bit of care. You must be certain that the driveshaft splines are the same, the driveshaft length is the same, and the gear ratio is the same. Force 85s used either a 2-1 or a 1.7-1 ratio for various years. The 120 used a 1.7-1 ratio. If yiou put a 1.7 on a 2-1 engine, there will be a loss in performance. It will then be necessary to use a prop 2 pitches lower.