Re: 1968 Mercury 100hp shifting issue.
My first guess would be that your shift cable is frozen up. IDK if you can try 'lubing' it with graphite, etc, or not, I've never had this issue, someone else on here may be able to tell you. I do know the cable is around 7$75-$125 bucks, but is pretty easy to install. You need to know EXACTLY how long it is, though, to replace it. Is this the motor that came on the boat, or do you know? If yes, and if SeaRay is in business still, (I know nothing about them) then if you can find a dealer, they can llok it up and get it for you. Also, I'm fairly certain you can buy it here on iboats, BUT, you have to remove it first and measure it. If you've never done this, I reccomend you at least take notes while you do it, pictures with a digital camera are better!
One other thing you need to try: follow the shift cable back to the motor, disconnect it at the top shift point, then try to operate that (the top shifter) by hand. If THAT is a no go, then the problem is NOT the cable, but in the lower unit. (You can double check that by 'working' the cable while it is disconnected.)
BTW, you can try this right now B4 anything else. The controller is what I'm assuming you mean is stuck in forward. (the lever is pointing to the front of the boat). If that's true, you should be able to spin your prop CLOCKWISE and it will "ratchet", and when you try to spin it COUNTERCLOCKWISE it should go about 20 degrees then stop. That will tell you if you have a deeper issue in the lower unit right off the bat.
You need to invest in a manual if you are going to do a lot of work on this motor yourself. The guys on here will reccomend you get the Merc manual. I have a Clymer, and it's O.K. The Merc one is much more extensive.
Best of luck! You're about to find out "free" is NOT "free"!!!!