More than likely when you disassemble it further you will find the "dogs" (pegs that engauge into the adjacent gear) will rounded off. Looks like you will have several gears needing to be replaced and at least that one fork. Take a good look and feel the transmission bearings. Its hard to tell right now what caused it, very possible the shift fork is bent. May be better off and cheaper looking for a complete used transmission and shift forks but take a look at the stuff closer and see if any other gears are showing signs of wear and see if you see any problems on the shift drum. As far ass cleaning I would get some good solvent or a couple of cans of brake clean from auto parts store. Take transmission parts out and engine main bearings out but keep them in order so they are replaced in correct spots because they are select fit for that certain bearing. leave the kick start assembly in because you will regret taking that out. Use a razor blade too clean the old gasket sealer off the case halves.
