2002 Merc XR6 150 HP. Launched my bass boat this morning. As I put it in reverse, the gears kind of ground, then something popped. It went into reverse and will not come out now. The shifter is not stuck, it moves freely but does not change into neutral or forward. I took the housing off and the gear selector is in place but there is some type of arm it is linked to that is sitting under the motor that looks like it is off. I can see it but can't reach it. At the end of it there is about a 1/2 inch hole that looks like it ought to sit on something and there looks like a washer mark on the top. Could this be my issue? What can I do about it? Any help is appreciated.

sounds like you busted the clutch dog-
check with Mike at North Texas Fiberglass..

To get to the shift arm you will need to remove the lower cowl.....on 90's model merc's (Your's should be similar) there is 4 bolts two on the front and two on the back that hold the two lower cowl pieces together. You will also have to unhook the wiring for your tilt/trim, and hose to your "telltail" you should be able to get around unhooking your throttle and shift cables and your wiring harness plug. The shift arm should have a nut and washer on top that holds it together with the lower shift shaft...if this loosened and fell off you would just need to find the nut and washer in your lower cowl and replace...if either part broke you would have to replace them....all information is based upon your motor being similar to a 90's model....I don't think they have changed much though.