Disconnect the cable from the shifter, then with the engine off manually shift the engine into forward gear and then try and spin the prop by hand. If you feel resistance then it's in gear and the problem is with your cable. If the prop spins freely then it didn't shift and the problem is in the unit. I don't know what kind of prop you have, but it's unlikely that you blew out the prop hub since you say you can shift into reverse and it runs ok like that.
Were there any grinding sounds coming from the lower unit while you were out on the water or when you were shifting it under power?? 
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1987 V20 w/1987 150HP Yamaha on a Shoreland'r Trailer
1978 16.5 Airslot w/1996 120HP Force on a Four Winns trailer
1996 V21 w/1993 200HP Mercury on a Shoreline Trailer
All towed by a 5.7L Hemi Durango.
If God didn't have a purpose for us we wouldn't be here, so
Live simply, Love generously, Care deeply, Speak kindly.
(Leave the rest to God) 
Silence, in the face of evil, is itself evil. Not to speak is to speak, not to act is to act. God will not hold us guiltless.
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