I think you have done a good job diagnosing the problem so far, and that your shifter cable is bad.
I recommend that you change both the shifter and throttle cables at the same time as it's not much more work to do them both at the same time.
They should cost you about $40 a piece, and are readily available (When I did this on my boat, Fisheries Supply in Seattle had them in stock)
I don't think that lubing the cable is the answer. I wasted a lot of time with that, and it didn't help. The person behind the counter at Fisheries explained to me that the cables were probably abraded and that moisture had gotten inside and corroded it.
Count the number of turns on the nuts on each end before you remove them for easy readjustment of the new ones.
Make sure that the new cables don't abrade again.
I was able to do this job in a couple of hours.
Don't risk losing control over your boat for this.
Get 'er done! and good luck!
1987 CS 36 Merlin "Kyrie"
"They drove a dump truck full of money up to my house. I'm not made of stone!" -Krusty the Clown
Last edited by djodenda; 07-12-2008 at 02:02 PM.
Reason: On reflection, I didn't care much for the tone of my original post