Thank you to everyone who replied -
I had a 15 mile or so run w/engine turning 3-4K (28 mph on the two-ton searay) and stopped to walk a beach - when I went to back away - would not go into reverse - gearshift would barely go past detent.
When I pulled it apart - no metal - oil fine - nothing appeared out of order until I got the propshaft out. I could see the clutch would not move enough to engage reverse gear. (The one mounted on the carrier) ???
I took apart the shift spool parts (small cotter pin and a nut of sorts) and slide off the parts. When I looked at the forward gear, i was puzzled by the needle (roller) bearing being partially outside of the gear. Odd as I have never seen or read of such an arrangement. I looked at the rest of the pieces and all in very good condition. I had replaced the water pump and shift cable in late spring and had used the boat another 40 hours or so (at least) and no problems till the last time of use.
I ruminated on the bearing being where it was as that being out of the bore stopped the clutch from being able to move to engage reverse.
??? I looked at the forward gear and saw there is a lip at the end of the bearing bore (at the side next to clutch dog) and !!! - aha! somehow the bearing has worked it's way out of the bore. So, I got a correct size bearing seating tool and pressed the bearing back to seat against the lip.
Took a bit of force I noted, not anywhere near "loose" - Assemble and now clutch moves as it should.
NOTE: This outdrive is a GLM I bought from "Basic Power Industries" at Harkers Island, NC
Boat has never been in salt water since I rebuilt is (bought from almost a junk yard) - I rebuilt the 305 SBC and paid someone to replace water pump and seals in lower unit. Later it totally failed when oil leaked out and I was cruising. The upper gears actually melted!
So - "screw-it" - I bought the GLM. Other than water pump - never had any issues till this bearing issue.
I found another blog where someone had same issue and got a new GLM gear set and poster noted the forward gear needle bearing is held in by a snap ring. Nice eh?
I also read the only way to remove the forward gear needle bearing is totally destructive.
Staking the bearing not possible - the gear is case-hardened/heat treated steel alloy. I could have got a puller on the bearing but didn't think of that while is was part way out of bore. If I had thought of doing that, I could have put loctite on it - which have also read is recommended by Mercury shop manual using Loctite 271.
I don't know how long the bearing has not been fully seated in the forward gear and previous to changing shift cable (boat still had original from factory) - and now think maybe is has been some time as getting shift mechanism set up so gearshift works properly has been near impossible. A lot of time to get out of reverse had to move shifter almost into forward.
GLM notes: Getting the drive pinon nut off was very easy - $$$ painful as the proper tool is $150 or so. I was reticent to try an open end wrench as didn't want to chance rounding off nut and consequent PITA issue! Using proper tool, nut came off very easy.
Getting the pinion off - not so easy!!! using various implements of destruction, (screwdriver mostly) I got the pinion off. And fouled up the process by pulling driveshaft out to far and the lower rollers from bearing fell into gearcase. Mechanical puzzle to get the pinion gear out with rollers in the mix! SO, don't pull the drive shaft any more than necessary to get threads out of way. (I can be taught!)
The issue of getting off the pinion? GLM left some metal shavings on the splines. Cleaned up everything and waiting for new water pump stud (galled thread - gotta love stainless steel) and rear prop-shaft needle bearing. I broke the perfectly good one trying to drive out the seals. It pays to be careful. New bearing about 20 bucks w/shipping.
The bearing carrier "nut" was very easy to remove - no corrosion as never seen salt water. There is a fellow: Michael Borders - who has a great video of rebuild a lower unit - complete with having to destroy the "nut" to get out the carrier. Mine came out almost as easy opening a bottle of beer! (32 oz with screw cap

)
If I'm still alive (I'm going on 80) and this bearing works out again - i will get the GLM gear with the retaining ring. I can get the lower gearcase off the boat in about 30 minutes and can get the gearcase apart in less than a couple hours. PITA to spend a day doing but Wife and I *love* boating and we use the boat for overnight camping on the lake (John H. Kerr reservoir/AKA Buggs Island Lake)
Thank "you all" for your comments and suggestions. I hope my info about this fun helps someone.
Cost to do this work - less than $300 due to tools I had to buy. Parts minor part of the bill.
If I had taken to a boat repair place - I figure I would have been out way over 1K $
Plus the activity helps my weight - no beer drinking while using tools! !!! especially a chain saw
Cheers Everyone!
Adding - I note on EBAY one can buy the forward gear and pinion - no reverse hear.