No Reverse, Noise in Neutral

1996 Subaru Outback 2.5l, automatic, 118,000mi

Got off work, pulled out of parking lot with no issues, drove 35mi home and parked on hill, facing uphill. Next morning, car at first wouldn’t shift out of reverse (from P to R, wouldn’t go to N). Shut off engine, restarted, and pulled on it and it eventually went into D. However, now when its in R, it clunks like its put into P, and the car won’t move forward or back. This also leads to a “burning clutch” type smell. In N, it makes a grinding/gravelly noise when rolling forward or reverse. Shifts into all forward gears and made it around the neighborhood fine (hilly neighborhood, had to drive it down to level ground to check fluid, which was foamy, but about the right level). Added about a 1/4 cup of ATF, no difference.

Could it be just the shift linkage or does it sound more serious than that?

IMHO it sure does sound like a shifter linkage problem. This linkage is probably a cable so it may be jamming and not allowing the transmission to go into the detent positions. Therefore, the manual valve might be in partially shifted postions. Have the mechanic disconnect the cable and run the manual sector to all its positions and see if the internals are free. Then check the shifter to see if it is operating freely. If everything is operating freely, do the manual linkage adjustment to make sure it is set correctly.

The “burning clutch” smell is of concern because it smells like you might have been partially in reverse while the parking pawl was engaged the the park gear.

Hope that helps. Let us know the ourcome of this.