The three 'arms" that hang down under the car, from the shifter have holes that can be aligned by inserting a pin. (kind of a PIA because your working up in the tunnel)
then the rods can be adjusted if need be. Probable not an issue in this situation.

LOL, I am about running out of guesses.... I mean suggestions to try.....

Leathermang:

I believe the shifter unit was installed properly using a fixed point or it would not have worked for a short while as it did before crapping out. The shifter feels fine going into first or second (sometimes can't go even there now but can work it so these gears do work). Shifter seems tight...not loose.....but when trying to upshift into third or fourth (and sometimes reverse), it locks up in second gear or reverse....the shifter will NOT move one way or the other, and if I release the clutch, the car will stall because it is still in gear (second or reverse). It's as though in going to another gear, it selects two rather than one gear causing this seizure of the shifter.....

hey Teddy, at this point try checking the set point as I diescribed in post 12, if only for your own satisfaction that your mechanic has done this correctly. if something is loose, that will cause an issue, then you need to determine what is loose, either the bushings, arms, shifter or transmission internals. but until you check it at the set point we are all just guessing.

also, sometimes when your info is filled out with a location, some kind member may even offer to personally help if you are in the area :)

Allens were checked out and adjusted by mechanic last week so this is NOT the problem. Just spoke with him by phone this morning. Shifter was aligned properly when installed using a fixed point so this is NOT the problem. He has ordered new black rubber/plastic bushings to install at ends of shifter rods to insure that these are tight and will install today.

It now appears after several hours of tinkering with the car shifter and examining the workings of the rods underneath the car that when shifting from REVERSE, the shifter unit and/or tranny does not return gear box back to NEUTRAL so that when one tries to go forward (use forward gears), the shifter seizes up and no longer works. It will go back to NEUTRAL occasionally but not all the time. THIS APPEARS NOW TO BE THE MAIN PROBLEM.......

Once again thanks to one and all for the feedback. This is a real bear of a problem. Is there an adjustment or fix that is now required to get to the bottom of this problem and to fix it permanently?

lutzTD.....

thanks for the advise....I am located in NW Connecticut in the town of Litchfield....the only thing OLDER than my car are the houses here....lol.....by several hundred years...if there is anybody who lives in the area, please let me know. Am eager and willing to share information on this car online and offline.

This thread is being continued with different emphasis here :

http://www.peachparts.com/shopforum/diesel-discussion/240328-perhaps-not-shifter-but-tranny-1982-240d-issue.html