Re: Lower unit question??
OK, does it have FWD-Neutral-REV if you shift the control box when it's not running (you might have to spin the prop a bit to get it into reverse).
CAVEAT: Don't Do This unless you pull all the spark plug wires to ensure there's no possibility of the motor starting!
Now, if you can still get the gearbox to shift, try this in FWD: rotate the flywheel clockwise by hand (or put a 15/16" socket/ratchet on the flywheel nut) and see if the prop moves.
If not, shift the control box to REV and try the same thing. If the prop STILL doesn't move, try this:
With the control box still in REV, try turning the prop CCW. You should feel the resistance of the gears etc as you turn the prop. HOWEVER, if the flywheel does not also turn while you're doing this, I'm afraid, My Friend (as Horatio from CSI: Miami would say), you've got stripped splines in your driveshaft/crankshaft or both.
The only reason I'm thinkin' this is because the lack of water and shifting happened at the same time.
It may be purely coincidental, but doing the above would rule out that problem.
Your telltale maybe is just plugged and a puff of air will clear it out; the shifting could be some other problem like reverse lockout latch etc.
Try the flywheel vs. prop thing and see if that tells you anything, then let us know what you find.
HTH & G'luck...........ed