Hi Aaron

Thanks for the picture, think i understand a little better now, if I recall I did mention that I may not understand completely what is going on!

But now your gearbox issue, it never rains does it?
If the output shaft is turning with the input when neutral selected that would imply that the bearing between the input and output shafts is jammed, hence acting as one shaft, when you engage a gear you now have two forces trying to turn the output shaft (at different speeds) so it won't turn at all.

Obviously I'm not familiar with your gearbox but it sounds as though clamping the front cover up is putting a force on the input shaft through to the output shaft. What happens if you back off the bolts holding the input shaft (just a bit at a time)? Does the shaft turn more freely (with the 'box in neutral)?