[BrianG]

OK, I edited your pic to help explain the tranny. They are kinda fuzzy so it's hard to see details, but that's ok...

Possible problem 1:
Both first gear and second gear are supposed to move freely if the dog carrier is not up against them. When you shift, the shift fork moves the dog carrier back and forth against first gear or second gear. There are two dog teeth (hidden in your pic) on each side of the dog carrier that engage on the sides of first or second gear. When this happens, the previously free-floating gear moves. Check these teeth to make sure they are there.

Possible problem 2:
Make sure the shift fork will engage both gears when moving it back and forth. If doesn't slide fairly smoothly, the servo may not have enough power to overcome this.

Possible problem 3:
You don't have a picture of the top shaft and the metal gears, but check to make sure both of them are securely fastened to the shaft. If either will turn on the shaft, the pin broke.

Possible problem 4:
How are your idler gears? These are the two smaller ones between the top and bottom shafts. These tend to get stripped which is why people get the steel idlers.