If it won't shift even when manually shifting at the motor, it's probably got internal problems. I'm assuming you disconnected the shift cable from the motor when you tried that.
You can pull the lower unit off and try to manually shift (with pliers or Vise Grips on the shift shaft - cushion the jaws with tape etc so you don't bugger-up the shift shaft).
Note when you're trying to shift with the motor off, it's best to have either the driveshaft or the prop moving a bit, this helps ensure the shift clutch slides into engagement with the gears when shifting from Neutral to Reverse.
Unfortunately if it won't shift at the shift shaft, it's got problems inside and will need to come apart for repairs. Try draining oil out the bottom and see if it's loaded with nice, shiny, metal particles. If so, that's the innards of the gearcase being ground to bits!! Usually not a good thing.
If you find that the lower unit is hammered, you just might be better off finding a good used one off your local
www.craigslist.org or eBay.
A bud of mine was working on a V6 and we drained an Ton of metal out of the gearcase. He found an excellent lower unit on eBay for far cheaper than repairing the dead one, even with shipping.
HTH & G'luck.........ed