Was on the water traveling about 35mph when it felt like the prop came off. Check still had prop but no thrust. Prop spins but hard to turn with both hands and it feels rough when spinning.

solid hub or rubber hub prop? If rubber hub, sounds like you spun the hub.

Checked that also. Hub is good.

When the engine is running, does the shifter move as normal?

If you're lucky, you only broke the vertical shaft. Drain the lube and see how metal comes out.