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Hello. My name is Tan.
Disconnect the shift cable coming from the control at the shift bracket on the engine now try shifting by hand will it shift?
Does the engine shift into gear ok but will not shift out of gear is this correct?
Have you verified the interrupt switch is working?
Have you checked the gear lube in the drive? We need to separate the control from the shift bracket to eliminate it as a possible cause of the issue.
Now Mercruiser techs should know that once the shift cable to the drive has been adjusted at installation there is n readjusting as it is only a temporary fix if at all. So why they adjusted the cable is beyond me. They don't go out of adjustment unless some messes with them.
How did you verify the shift switch function?
Ok we need to disconnect the shift cable coming from the control and see how it shifts. Shits the drive from the shift bracket. Then shift the drive manually. Does it shift correctly?
Did you damage the prop when you drug the drive?