I know this thread is a few months old, but I thought the following would be helpful:
Refer to photo for description below.
The reversing gear on the Atomic 4, what many refer to as the transmission, is easily adjusted.
You will need only a few tools:
Large flathead screwdriver
Gasket (available from Moyer Marine HERE
Permaflex gasket sealant
Before removing the cover plate, put the motor in neutral. You should be able to rotate the shaft at the coupling by hand. Once that is done, remove the cover plate.
The plate for the reversing gear cover is held in place with four half inch bolts, which are easily removed. Once the bolts are removed, the plate slides right off. When the plate is removed, you should see the assembly in the photo above.
The shaft should be spun so the lockscrew is positioned at the 12 o'clock position and visible as illustrated in the above photo. The lock screw and the adjusting collar (which is the gear the lockscrew secures) adjust the forward gear. The reverse adjusting screw adjusts, you guessed it, the reverse gear.
Adjust the forward gear first. This is adjusted by manipulating the adjusting collar. If the collar is moved to the right, it will tighten it. So, if your forward gear slips while engaged - which is common - you would move the collar to the right.
To move the collar, back out the lockscrew until it no longer engages the gear. IT IS CRITICALLY IMPORTANT THAT YOU DO NOT REMOVE THE LOCKSCREW FULLY. If it falls into the oil beneath the assembly, you're in for a long afternoon. Once the lockscrew is backed out, the collar will be able to move by hand. If it sticks a bit at first, apply steady, controlled pressure. You need to be able to monitor how much you adjust it. It typically requires only a notch or two to be sufficient.
When the collar is adjusted, simply back the lockscrew back down. It is important to be sure it fits securely into the teeth of the adjusting collar. Also, do not over-tighten the lockscrew.
The procedure for adjusting the reverse gear is equally straightforward. The gear is adjusted by a 3/4" inch bolt called the reverse adjusting screw, again see above photo. If you are slipping in reverse, tighten the bolt; if you cannot engage reverse fully, loosen the bolt slightly. Do not overtighten the bolt as the retaining plate can break.
Test your adjustments by engaging forward and reverse with your shift lever. The forward gear should engage firmly after passing through it's detente. The reverse gear does not have a detente, so just go by feel. You should be able to push your gear shift fully into the reverse position. If you cannot, then you need to readjust.
After this, simply replace the gasket and reinstall the cover plate.
TIP: You may want to go ahead and change your oil while the cover plate is off. The Atomic 4 is designed so the engine and the reversing gear share the same oil. Simply pump the oil out of the easily reached bottom of the reversing gear assembly. Not only is this far easier than sucking it out of the oil level tube, you can usually get more oil as you can reach lower into the assembly than the oil level tube will.