Here's some more pictures from the motor teardown:
I found the reason it wouldn't shift:
One of the forks was stuck fast against the shaft. The other one was sticky. You can see how they rusted after being out of oil for so long. I worked the stuck fork off the shaft, and polished the shaft with some fine grit sandpaper. The forks slide just fine now
Getting the retaining pin out of the shift fork on the shift drum was a real PITA as well!
I used a long bolt, some washers, and a pair of nuts (heh) to press the cylinder bores off the pistons.
The pistons are in ok shape, but the oil control rings are cracked and broken. A new pair of them are on the way from Chiba city Japan.
I cracked the case next...
...and found some serious sludge. I haven't seen sludge this bad since the last time I pulled a valve cover off a Dodge Shadow!
Other than the sludge, the gear set looks good. No damage to the teeth, and everything slides freely.