My 67 mercruiser did this, and here's my solution:
It was a misadjusted cutoff switch near where the upper and lower shift cables meet. It's there so you can't go full speed in reverse (at least that's what I imagine) but it was misadjusted to cutoff the engine as soon as gas was applied in reverse. I simply adjusted a threaded adjuster, and it now goes in reverse. Maybe this helps..![]()
Not sure what you actually adjusted on your 67, but there is no such thing as a reverse cutout switch to prevent over revving. There is however, a shift interrupt switch on the alpha and pre alpha drives that must work and be adjusted properly to shift out of gear without damaging the gears or the cables.