I could not find the exact date change to "horseshoe"...  happened on CT2 so it's possible that a late production CT1-C could have had the "upgrade".  It is a pretty thin washer...  and someone could have installed it inside... even though it belongs outside. 

Without that silly little washer, sometimes you'll have shifting issues, jumping out of gear, or "false neutrals". 

My CT1C has the horseshoe 

Thanks for verifying your C model also had it...  sounds like horseshoe happened sometime during the 1971 model production.

Anyway, with cover gasket missing someone had it off and shim is missing so I'd try to install shim.  Jiggling shift lever can help during installation.if drum moved over.

I got lucky. My gasket set included the one for the white plastic cover, and my assorted washer bin had an odd size washer that fit perfectly for the shim once I wiggled the shifter and pulled the shaft outward just a slight amount.

Thank you RT325 and MarkT for your guidance.