Interesting development.  I followed fleetwin’s suggestion and assembled the lower unit minus a gear, then reassembled.  Since I get confused about which gear is does what, I will say that when I assembled the unit with only what I believe is the forward gear, the unit froze up.  That being the gear furthest from the prop.

When I assembled the unit without that gear, but with the other one, the one closest to the prop.  The unit turned smoothly.  So it appears we have an ill-fitting gear.

I also noted that the hole in the pressed-in brass/bronze bushing/bearing on the good gear does not line up with the hole in the gear.  I assume this hole is there to facilitate lubrication getting between the bushing/bearing, and the prop shaft.  How critical is it that these holes line up?

Well, Surprise! Surprise! Surprise!

Looks like I have two different type lower units.  Here’s what I found in the one that was already turning good.  I was not expecting to see that.   This gear case also has the older gears that were somewhat rusted but salvaged via electrolysis.  I compared the problem gear from the unit that was seizing up (I’m going to call that (GC one) and the other gearcase (GC two) and I could see no difference between them other than cosmetic differences due to the older gear in GC two having had some rust.  I’m going to clean this case up and let the parts soak in some cleaner.  Not sure where to go from here.