The problem the boat has is a worn out lower shift cable.
Here is a brief explanation on how the shift system works.
The boat has 2 shift cables, an upper and a lower. The upper runs from the remote control box to a shift plate, the lower runs from the shift plate down to the drive. And they connect on a shift cable bracket on the motor.
Also on that bracket is a shift interrupt switch. This is what you disconnected.
The way it works is that (or supposed to work) that you can shift from nuetral to either gear no problems. But when you shift from either gear position back into nuetral, the upper cable will cause the lower cable to drag, and the lower cable activates the shift interrupt switch. The switchs job is to momentarily "stall' the engine for just 1/4 of a second. This releases the tension on the clutch and allows it to disconnect from the gears in the lower unit. Once the clutch is disconnected fro the gears, the drag on the lower shift cable is go, and the cable then snaps back into place, deactivating the shift interrupt switch. This whole thing is a bit of a process, with many things happening at once. But the overall process takes about 1/4 of a second. The engine does not actually stall, it just looses spark for a moment and then catches itself very quickly. So it should bog and then catch, every time you shift from an in gear position to back into neutral, when the boat is on the water. (the system does not work when running the engine on the garden hose)
So when you stall, it is because the lower shift cable is worn out, and causing a bind in 1 direction, and holding that shift interrupt switch open to long, causing the engine to stall. The cable is a wear and tear item, and on average, last about 5 years before needing a new one. But having it replaced will take care of this problem. Once replaced, you would hook up that shift interrupt switch again, and the sterndrive will shift smooth as silk.
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