First thing, you've got the gear box and shifter lever out of sync. If it is like mine ('82, 30 HP) there is a coupling nut that disconnects the shift shaft at mid-point. You can access the coupling nut via an opening in the front of the drive shaft housing, about mid-point. Loosen the lock nut and disconnect the coupling nut. Use a pair of pliers to move the lower shift shaft up or down till you hit neutral (you'll be able to spin the prop by hand). Then put the shift lever in neutral and re-connect the upper and lower shift shaft. Note: you may have to have shift lever and lower shift shaft in reverse to access the coupling nut - just make sure both are in the same gear position.
To check, put shift lever in neutral and you should be able to freely spin the prop by hand.
If your motor doesn't have the shift shaft disconnect at mid-point, figure out how you do disconnect it (has to be a way, so you can pull the LU). The drill is the same.
