imq-
I had some success lubing the shift cable on a Stingray with an Alpha we have up north-
Take the black plastic end off the cable (two little square-head cinch bolts) and build a makeshift funnel out of some aluminum foil around the cable end. You can hold it in place with a tie-wrap or rubber band. Prop the cable up so it is vertical.
I used a product called 'PB Blaster'- it can be found at automotive parts stores and is one of the best penetrating oils. I kept applying the stuff to the cable end for a day, reassembled, readjusted, and it worked like new. Haven't addressed it again on that boat for 3 years now.
This may not work for you, but beats having to change the cable if it does.
Jim

gimbal change
 

the reason the drive was so hard to re-install was the gimbal bearing has to be aligned to the enginge coupler with an alignment tool. If this is done the drive usually slides right in. Since you have run the drive the gimbal bearing has most likely re-centered itself. I have never heard of a long term lubrication fix on the cable before. It might be worth a 1/2 hour try. but much more time than that I'd say put the time toward the proven long term fix of a new cable.

Thanks again for all the help. I think I might go ahead and try to lube the cables and see if that helps. If not I might just pull the drive. Is there a possibility that something is the shifter control may need to be oiled or greased?

I had the same problem last year on my Scarab... mercruiser tech fixed it in about 3 seconds... mostly idle and cable lube, nothing major. He says they just need a little tinkering now and again.

rwilson, do you remember what the tech set your idle at? My boat idles at around 800rpms in gear, 900 in neutral. Is that to high? I checked the cables today and they all seemed to move freely, maybe I'll start playing with the idle speed and see if that helps. Is there a possibility that something could be wrong with the drive?

I think I'm idleing at around 800 in neutral?