Above is what the shift mechanism looks like. The shifter rod comes up from the gear case and goes into a slot marked in red on #6, that's the piece that turns the shifter rod. The shift handle is #4, and the connector that pushes #6 to shift is #7. The problem was that there was corrosion behind the plastic bushing #3, which locked up the shifting. No big deal if you could reach it, however, to get to #6 and #3, you have to remove the entire cylinder head assemble, the entire head!
I had no desire to take apart the whole thing, so I red necked it, and got it done by only removing the carburetor. I noticed that part #12 really is only needed to hold the starter lockout lever (the cable that stops the rewind starter from starting in gear), and its only other function is to keep the lip of part #6 and #3 from coming out. I learned this because I removed the lower unit and then put a rod up through the tube and into part #6 and hammered it out, and broke the part of part #12 that held down #6. Well I did get everything out. I cleaned the hole as best I could, bad angle, but it made no difference, so I sanded part #6 reducing it a tad in diameter, greased it up and greased the bushing and re-installed everything. It works great now. If the #6 decides to come up it is still held by some of #12, however, if it is a problem, I will screw down a washer around the lip to hold it down.
Bottom line is I got her done without much work. The better way to do it, with what I know now, is to somehow (I think a long punch will do the job, then I can replace the slotted head screws with Allen head screws , which can be removed without so much trouble) remove the two screws, they are only like 3/4" long, then part # 12 comes out, and then part #6 can be hammered out with the rod as I did. In the future if I ever have to remove the complete cylinder head for some other reason, I will then do the job right, cleaning the corrosion better and putting in new parts #6 and #12.
That's it, I posted this for others in the future that run into the same problem