Frozen water in the transmission is not your problem. The lower end of your shift lever (and probably the shifter forks) are worn. As you were shifting out of first, the lever slipped past the fork. You now have the lever engaged to the 3-4 fork while the 1-2 fork (and slider gear) is still in the first gear position rather than neutral.
You MAY be able to wiggle the lever in the general direction of the first gear position and get the lever back into the 1-2 fork and shift it into neutral. In the very likely case that doesn't work, you need to knock out the pin that holds the shift lever in place. Once the lever is removed, you may be able to reinstall it with the lever engaged to the 1-2 fork. Alternatively, use a pry bar to move all 3 forks to the disengaged (center) position then reinstall the shift lever.
If the problem keeps happening, the more permanent fix is to build the bottom of the shift lever back up to the original size. This is done by welding some material on and grinding it down to match the original size.
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Today's Featured Article - Choosin, Mounting and Using a Bush Hog Type Mower - by Francis Robinson. Looking around at my new neighbors, most of whom are city raised and have recently acquired their first mini-farms of five to fifteen acres and also from reading questions ask at various discussion sites on the web it is frighteningly apparent that a great many guys (and a few gals) are learning by trial and error and mostly error how to use a very dangerous piece of farm equipment. It is also very apparent that these folks are getting a lot of very poor and often very dangerous advice fro
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