I think something with the shift mechanism has failed. To inspect the shift mechanism you will need to removed the left engine side cover, then that will expose all the shifting parts that rotate the shift drum to shift gears most likely you will find your issue there. If not then the problem may be in the trans. It is comprised of a shift arm, a spindle and a couple small springs and plungers. While you are in there I would see if you can actually rotate the shift drum itself to make sure it will move. Hope this helps.