Has anyone had the lower unit off since the last time it shifted normally... and if so, what was done at that time?

No it was running and shifting fine. I was out on the lake and it wouldn't go into reverse one day and I adjusted the cable and it worked for about a month and now I can not get it to work both ways.

Normally that problem is caused by someone changing the height of the lower unit shift rod when the lower unit is off. However, since that unit acted up while underway and you can obviously shift the engine via the engine linkage (moving the cable manually). that indicates that the lower unit is okay..............

Either the cable is somehow jumping out of the locking clamp at the engine, the cable broke, or something went wrong in the control box.

Disconnect the cable from the engine... grab the guide at the cable end and try to push/pull it without having anything move at the control box.

I made sure that the cable was secure and it still does not shift in reverse. The cable is not broke. Just curious if there is anything in the lower unit that could wear and not letting it shift because it is worn. Is there a shift lever or something like that?

Yes, there's a shift lever or something like that in the lower unit...... A shift rod goes up or down to move a fork like lever that is engaged within a cradle that cups a shifter dog that slides on a splined propshaft to have it's shifter lobes engage the lobes of one of the gears.

Your latest post of 07/20/16 with its explanation does indicate that something would be amiss at the engine... BUT... since you can adjust the cable and obtain either gear but not both at the same time, that indicates a cable problem.

Do this to pinpoint where the problem lies:

Disconnect the shift cable at the engine... now, shift the engine by hand simply by moving the engine's shift linkage. If the unit shifts into both gears normally, then obviously the lower unit is okay.

NOTE: If a problem exists with the engine's shift linkage itself, that should be evident in the above shift test.

The threaded trunion on the shift cable.... are you sure that trunion is locked securely where it belongs at the engine? Any possibility that the threads are somehow stripped and the threaded trunion is slipping on the threads?

I've been in this line of work for a very long time and if the shift test above proves that the lower unit is shifting properly, that the shift linkage is proper, and the cable is okay, I cannot imagine what could have went wrong at the control box or console control, whichever you may be using.

I will try that test tonight. I am not saying you are wrong at all, I do not know very much about boat motors. It does seem to move back and forth good when moving control from forward to reverse. When I took the cables off last night there are black ends on the cables that are plastic that hook to the shift arms. I noticed that the black ends are loose on the cables and move back and forth about 1/2 inch. I am curious if they are suppose to be loose or solid on the cable.

New cables, still have issue

Replaced cables and nothing has changed for the shifter issue. Still can adjust so it shifts into forward and just grinds when shifting into reverse. I can adjust so that reverse shifts into gear and forwards just grinds. Can adjust when they both grind and can't go into forward or reverse.

Ah Ha!..... And therein my friend is your problem. Those black ends are called guides and they are either factor attached via non adjustable, irremovable fittings... OR... are attached via brass or stainless steel barrels that lock the inner cable in via allen screws.

If you have the allen screw type, let me know and I'll walk you through the adjustment procedure.

If the factor type, replace the cable.

Cables that I replaced

I replaced the cables with the same style that where in the boat. Not sure right now what style they are but I listed the cables below of where I ordered them.

Teleflex CC205 Control Cable | Assembly 479 Series | Marine

I wish that rig was somewhere in this west central Florida area. That's one I'd really like to see.

When you said that you could move the guide 1/2 inch, I was sure that was the problem as it's impossible for the shifting to be normal with that much play.

Is there excessive play in the shift linkage at the engine itself? If all is okay at the engine... and you've replaced the cable(s) and the problem still exists, that would leave the control box assembly.

You've said that all was well (not in so many words) while underway then suddenly this shifting problem popped up.... is that 1/2" play still present in the shift cable? How about the throttle cable?

Yes it working for the first year I have the boat and gradually got worse until I couldn't shift into both gears. It there any way to make them solid or adjust like you said? There is very little movement in linkage. Is there any way it can be in the shift arm? I'm not 100% on how that shifts or if it could wear. Not sure where to look now.

Having covered just about every angle of the shifting system, and finding that the engine will shift normally if the cables are disconnected and the shifting is done directly with the engine's shift linkage, coupled with the fact that you have replaced the shift cable..............

The only thing left that I can think of is that the cable is not moving the needed distance to shift properly from neutral to the needed travel length.... and that would be due to something amiss within the control box assembly. What exactly that would be I wouldn't know without actually being there.