I was able to drop my lower unit ok with the shifter rod,
but the driveshaft came out of my lower unit and I can't
free it from the top. Is there something holding it in place?
This is a 1964 evinrude 40 hp.

Sounds like the gears stuck the shaft to the socket on the motor, no grease? I'd post this one on the http://www.iboats.com forum. There are some old timers there that probably know exactly what to do with that motor. If I understand what your saying the water intake tube and drive shaft are both sticking out of the top section of the motor?

I tried http://epc.brp.com/default.aspx?brands=ej&lang=e to see if 1964 40 had a diagram. No luck, they only went back to 1968. Try iboats.

I'm curious how it came loose from the lower unit?

Thanks Cajun, I tried iboats and they helped. The shaft actually
came out of the lower unit pretty easy. Now I need to somehow
get the driveshaft loose from the top. I'm going to try
visegrips and a hammer. Wish me luck.

Once again thanks for the input.

Vise grips and hammer worked.