Shift lever won't go in reverse

[CrashOverride]

I replaced the gimbal bearing, u-joint bellows, and impeller on my 77 Merc 260 with MC-1 outdrive. We put the upper part of the outdrive on and decided to shift it through the gears before putting the lower on. When we did we found that we couldn't get the shift lever to go into reverse. We pulled the outdrive back off to make sure the shift ball was lined up in the fork and it was. We can't get the lever in reverse even with the outdrive off. It just goes part way and then "hits" something.

We had to raise the motor about 1/4" to get the engine aligned. Could that have caused something to come out of alignment in the shift cable? Note that I didn't take the bell housing off and didn't mess with the lower shift cable.

I watched a video referenced on these forms demonstrating how to adjust the shift cable but I don't know if I'm on the right track or if it's something else. Please let me know what you guys think.

 

[CamaroMan]

did u connect all the bits on the shift bracket? didnt maybe accidentally swap cables or something? gotta be sth small if it worked before? maybe the (lower) shift cable is cut too short, did u cut it at all (the inside wire)?

 

[Bt Doctur]

http://vid57.photobucket.com/albums/g219/BtDoctur/DSCN2491_zpsea1cc235.mp4