OK, like an idiot I was simply putting the shift linkage in backwards. I turned the rod around and it clicked right into place.
However...
When checking out this motor I saw it was not pumping water and when I dropped the lower unit I found there was no water pump at all. I bought the motor knowing it was not running and it was obvious someone had been taking things apart so I was only a little surprised. Problem now is it seems more is missing than just the water pump. From poor photos I've seen it looks like the shift rod has some sort of plate that holds it in place, perhaps incorporated into the bottom of the water pump. When I order a new water pump I want to also get any other parts it may need. Also the parts diagram shows some sort of pipe and fittings in front of the shift rod and I see none of it nor any place it could be, (see photos)
Any help appreciated.