The pinion engage lever moves a rod with a "finger" on the end of it which pushes the pinion into engagement with the ring gear. Sometimes the "finger" will crack and break or maybe the other end of the lever (inside the housing) too. There is also a guide pin to align the "finger", possibly the guide pin fell out and the finger is misaligned. Unfortunately, about the only way to fix it is to pull the engine.
'46 Willys CJ2A Farm Jeep, '49 International KB-7, '31 Allis Chalmers U, Cushman Scooter(s)
Antique garden tractors & outboard motors
Other rusty old junk comes & goes without warning.
The 2 most useful tools to have in your shop are a Crystal Ball and a Magic Wand