Well, I pulled the shift linkage off last night and you can clearly see the transmission wants to engage but is slipping in reverse. I bet it is a blown seal because there is plenty of clean fluid in there. Regardless, I winterized the motor and am going to pull the transmission out next week for an overhaul. I found a very good pdf for the 71c overhaul manual.

http://www.engine-cemberci.com/engin.../VELVET/12.pdf