1983 yz80 transmission problems

Hello. I recently purchased a 1983 yz80 to fix up and teach my girlfriend to ride, maybe have some fun playing around, that sort of thing. It's in fair condition, looked mostly functional, except for the transmission. The shift lever, and the rod it is on. The rod has what I feel is an excessive amount of play. The gears randomly shift and don't shift for reasons unknown. At first it would only go from neutral through third. Then it went from second through sixth, but no first or neutral. And now it's stuck in first or neutral only. I was in the process of taking the engine apart, just to check things out and I am hung up on the magneto holding nut, and the clutch holding nut. The manual says to have an assistant apply the brake, and loosen the mag nut. However, there is no resistance build up, all that happens is that it moves the drive chain and slowly spins the wheel. I've tried liquid wrench, holding the brake pedal like it says, and putting some wood through the wheel (ended up snapping a spoke). Any ideas or advice?

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