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The problem is a bent shift fork. The repair is major surgery on the transmission. The entire engine comes apart just to get to the forks. Some special tools are required. The generic diagram below shows how the shift forks work.
Sounds like your second gear planet gear is not fully engageing, it could be worn down. also the shift fork could be out of adjustment. If you hold it in second, will it stay?
personally I have never heard of a chain breaking and having any affect on the transmission and shifting. although if the chain broke and caught the shifter, it may have pulled the shifter so hard that it could have bent the shifting forks inside the transmission.. this would explain most of your problems..replace the chain,and with the bike "off" and in neutral, on level ground, rock it back and fourth about 6 inches and try shifting from neutral to 1st and then back up to neutral, and then to 2nd. keep rocking the bike back and fourth while doing this and do this WITHOUT using the clutch. If it wont go to the gears easily, the shift forks are likely bent. there is a safety switch for the kickstand that will shut the bike down if the kickstand is down and bike is in gear. if the kickstand is up and releasing the clutch shuts down the bike, the chain may have damaged that as well. Hope this helps..
The bike has a bent shift fork or two. This is a major repair on the bike. The engine comes out of the frame, gets flipped upside down then the bottom casing comes off. This allows access to the gears and shift drum / shift forks. I do not recommend this repair for a novice mechanic. Call a Yamaha dealer to confirm my diagnosis and to get an idea of the repair cost. The cost will probably be $1000 to $1500. Bummer. Please rate my answer.
The lower fork is bent. It is impossible to just look at a fork and see the bend. Wierd that you can't see the bend, but it IS there.
Check the shat that the fork slides on to be sure it is not bent also. Bent shafts do not happen often but they do happen. The bad fork should slide freely on the shaft. Also, put the shaft on a flat surface. Roll it and look for any gaps between the table and the shaft. If a gap shows the shaft is bent.
I checked Babbitt's and it looks like they have forks and such for your bike. You might want to get fresh points, condensor, engine seals and gaskets, etc.. Please rate my answer. Thanks. www.babbittsonline.com/pages/parts/viewbybrand/default.aspx
You have a bent shift fork (or two). The bend in the fork will not move the slider gear properly and causes the lockup. Expensive to fix. The engine gets a complete tear-down in order to get to the gears and shift forks.
Try moving the shift lever up a notch or two. This will help eliminate any accidental lifting of the shift lever by the shoe. No cost to try this one.
Your bike has a shift drum index wheel that holds gear positions. The spring may be weak on the index wheel arm. This is the low cost attempt a solution to the problem.
The other potential problem is a slightly bent shift fork. It may only be barely engaging into first gear. This is the more expensive of the three potential solutions.
If you are hearing a bad grinding noise then Stop riding the bike NOW. If you continue to ride, or run the engine, you will only do more internal damage and make the repair cost higher. Chances are you have a bent shift fork and the noise is the engaging dogs on the slider gear grinding the side of a fixed gear because the bent fork is preventing full engagement.
The entire engine comes out of the frame and gets completely torn down. The top end comes off, the case covers come off, the clutch, shift shaft, kick starter, flywheel and electrics all come off. Then the case is split to gain access to the gears and shift drum. The gears and shift drum now get removed and now the fork can be replaced. If a gear needs to be replaced because of a broken teeth, replace also any gear the teeth mesh with. A few special tools are needed. Sorry for having to give you the bad news.
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