Re: 1958 18 hp evinrude shifting problem
I have the same motor and I replaced the lower unit. I don't think there's any way to adjust the shift rod. The way it fits into the coupler (the place half way up the motor), there are groves at the top of the shift rod that must line up with the bolts in order for the bolts to screw in all the way. I don't think you can adjust it, it's either in there or it's not. Also, it doesn't matter what gear it's in when you put back together b/c once it's connected you just shift it to whatever gear you want.
If the shif rod is connected and it moves in and out of gear when the motor is off, and it won't do it when the motor is running, it's something wrong with either the clutchdog or the gears, but probably the clutchdog. Apparently if the previous owner didn't engage the motor into gear swiftly it wears away the clutchdog and rounds off the edges of the teeth on it so after a while it won't stay in gear any more.
If you can't figure it out, check ebay, there is a lower unit on there right now for this motor for $129. I don't know if you can find a replacement clutchdog and what if it's not the clutchdog but the gears? Just replacing the whole lower unit is easier, but maybe more expensive. At least then you have extra parts in case something happens to the new lower unit.