The linkage you refer to is the freewheeling system , in the position in your pic it is in freewheel , in other words it can be easily wheeled about without engine running. Slightly and gently lift the tab and move it towards the gearbox and your machine will be in drive , you may have to slightly wriggle the machine from side to side to align the internal splines , but this is common , under no circumstances force it.
Your cylinder bore , although not easy to tell from the pics , appears to be OK , is there any undue “piston slap”??.
Again from the pics it seems to already have had a new coil fitted , so assuming the conenser is OK , I see no reason why you shouldn’t have it up and running fairly soon.
The bane of the 700 was the air filter , if you intend to use it regularly , make sure your hose and joints are all in good order , and that the filter is also , taking care that it seals properly inside the housing. I think I’m right in saying (Hortiman may well confirm) that a Diesel grey Fergie oil filter will do the job as a relacement.
Luckily I haven’t encountered this problem with mine , as it has the very rare and unusual oilbath air cleaner system.
Keep us posted with your progress.
Andy.
