Couldn't tell for sure without taking it apart, but I'd guess that the gear dogs are worn, or a shift fork is bent. (most likely betting on the dogs though).
Transmission parts are CHEAP. Even new, they're cheap. However, the labor will kill you...
If you (or your friend) has the ability to read and comprehend english, I'd tell you to pick up a service manual and repair it yourselves...
If you're not into repairing it yourself, you're probably better off with a new motor since the labor to replace it would likely exceeed the cost of a new motor...