Are you sure neutral is being identified by the "divot" for the ball and not the "rivet" that contacts the neutral switch?   Maybe confirm both the rivet is lined up with the switch hole (forward hole, straight up) and the divot is lined up with the detent hole (rear hole, angled back) at the same time?



(Not really doubting you, just can't see what you're seeing and this is a really odd problem.  These transmissions are not normally that tricky at all once you get them in the case)

I've always installed the trans into the right case first, always seems to be MUCH easier for me that way.  And if you could see if it acts up which might be clue to something in the right case half is causing the issue?  

 

Yep. Lined up perfectly. Never thought about installing on the right first. I'll give that a try.

My only other thought is something is binding when the two halves go together.   Everything matches up when dropping the right side on. 

Do you think maybe tapping with the mallet could jiggle something loose? Maybe I should try installing with a puller like on the left?

Thanks again!
Tsmitty

Ok. Installed on right side. Can't seem to find neutral even though I believe it should be close. Should the gears move freely?
imgur.com/a/51c3nZu

Look at the location of the neutral switch in the left case.  The rivet head in the shift drum should point straight up at that hole in neutral.  Basically if you extended a line straight up from the rivet it would be close to perpendicular to the top edge of the case.  (shift drum in these pics needs to be rotated counter-clockwise slightly when looking down at the end of it from the top the way you have it sitting. 

I mentioned earlier the shift forks are all different.  The single one to the right in these pics is #2.  I saw it was correct in your last pics.   

From memory, the upper fork in these pics (closest to the countershaft sprocket) should be marked #1.  The lower fork on the double side is #3.  The way I remember that is with the engine in the bike the forks are numbered 1, 2, 3 from left to right.  #1 and #3 are similar and can get mixed up.  

Also it looks like the end of the drum in these pics has been rubbing hard on the left case?  That's a little odd.  Shift drum should have a tiny bit of end play when cases are together.  Is the drum seating all the way into the right case?  (On some 175 models, the plates and pins on the right side of the shift drum needs to be put on after the drum is installed in the case, I think that might be the later models though)

Pic might help

Mark…Look at the shift arm in front. “#2” Isn’t that pin reversed?  Clip should be showing?? 

imgur.com/a/Tc4hC3s

Gears do not turn

Hope I'm not confusing things just ignore me. Are all three selectors all on the correct shafts. I know you said never had it fully dismantled. No matter if in neutral or in gear it should still revolve except in neutral just one shaft revolves. Is there a bent tooth on one gear. Probably not or it'd turn through it albeit tightly to get past if slightly damaged. Shim behind the horse shoe is too thin to affect any engagement to any degrees in my opinion. Man I hope you find the answer soon. I'm frustrated reading updates haha.

Yep. Never took the shafts apart so I know they are correct.
 

Did you line up the rivet with the neutral switch hole in the left case half?  Looks like drum needs to be rotated a little more CCW but hard to tell from pic.  

Really impossible to tell much from photos and descriptions like "gears won't turn".  

This is the third and last time I'm going to ask if you CONFIRMED the shift forks are in the correct places.  They probably are, but not getting responses to simple questions like that makes it really hard to help.  

Transmission is not rocket science.  Three of the gears are slid side-to-side by the shift forks and engage "dogs" into "slots" or "holes" to lock the corresponding selected gear to the shaft.  In neutral, none of the dogs should be engaged.  If something is off, like shift drum not seating (another question you've ignored answering), then two sets of dogs can engage at the same time which will lock up the trans.  

Like I've said, not at all common to have this issue with these transmissions and unfortunately from what we can see in the pictures there's really no way to tell what's wrong (like more than one set of dogs engaging at the same time).