You really should not engage the transmission while out of the water. You can burn up the cutless bearings in the strut pretty fast doing that.
I would think, that if you had forward or reverse working when you pulled the boat last year then there probably isn't much damage to the internal workings of the transmission.
Did you replace the oil with the correct type? I would take the boat down to a boat ramp and try running the transmission there. Check and change the trans fluid/oil to make sure it's not taking on more water.