Re: Mercury 35hp lower unit shifter prolblems
The linkage inside the gearcase has a ramp/cam that pushes the shifter into Neutral and pushes farther into reverse, both have a detent and will stay in place.
Rotate the splined shaft until you feel it 'click' into a detent, turn the prop to see if that detent is the Neutral or Reverse, shift the motor into that position and reassemble. Is using Neutral you may have to turn the flywheel to get the crankshaft splline to line up.