Small Engine Troubleshooting Problems? Ask a Mechanic Now.
Welcome to JUST ANSWER small engines, let me try to help you !! I don't know it all, but maybe together we can get you a satisfactory answer!
Transmission is a direct gear drive transmission and driven by drive belts from engine. The F/R change is made by the shift lever on transmission. With you having drive in reverse, problem is at transmission. Try moving the shift lever at the transmission manually to see if it is the linag not letting the lever go to the forward position. If the lever is moving, then the problem is internal to the shift fork inside the transmission and transmission has to be removed and split to repair.
I see question is still open, did you get to check the shift lever at the transmission?