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Have you disconnected the linkage and manually tried to push/pull the engagement shaft? It's spring loaded and should return to home position (but not running you may have to help it a little). Don't get in too big of a hurry to take the sprag unit apart if you remove it....lots of small parts...

RT....Gringeltaube is the man. ALL good info and the last link is great. Notice the spring holds it to the normal position and is shifted by the linkage to the reverse position. G...is the T1138 the same....except air shift? I don't see a neutral (at least a location intended to be neutral).

There are a lot of parts if you take the sprag tooo far apart to clean and inspect. I don't know if new ones are available, but I liked mine when it worked right. I think the sprag could come off with the TC on, but working overhead seems harder than taking the entire TC off to R&R it. I...

Remove the front and rear driveshafts, then do above. Holding the clutch in doesn't make the tranny or TC turn. I took the TC case out of my M817 and it's really not too bad if you are mechanically inclined. Getting to know the inside of that part is not a bad idea. Where are you in Indiana?