Re: 1964 40HP Big Twin
Other possibilities:
Are you sure you have the throttle set at "slow"? You can't shift it if it is set too far toward "fast".
It is possible that the shift clevis under the powerhead is broken. When that happens it slides out of the hole in the shift shaft and jams against the wall of the housing. It wouldn't be the first one, I promise. If you can't see any other interferrence, suspect that.