Help with Yamaha Malta please?

Hello everyone. I have a Yamaha Malta 3hp I bought second hand as a back up engine. It starts/runs great, however there didn't seem to be a stream of cooling water coming out from the hole half way up the leg. I had a look at the impellor...which seemed fine so put it back together. Now the engine is permanently in gear ie: I start it and the prop spins. I can't move the forward/netral selector (It is stuck in what should be neutral) but I've not applied any great force. I did disconnect the selector linkage inside the leg when removing the gearbox but connected it back hte same way (or so I think). Has anyone any ideas what's gone wrong...be really greatfull for any help. Also, on the tell tale issue, there is still no water issuing, but I've not let it run too long. I know it has a therm/stat as I've cleaned the housing and tested it. Does the stat stop any cooland issuing from the tell tale until the powerhead is up to temp?
Thanks in advance for any advice
Regards
Howard