Two questions:
Have you actually taken the shuttle shift plate cover off the housing yet?
and is your shuttle lever up near the steering wheel, or down by your knee?
I haven't had this happen to my TS354C yet (same shuttle as your 254), but I've had what you describe happen to my KM454. About once a year actually. Easy fix. At the bottom end of the shuttle lever is a finger. This finger fits into a fork that moves on a rail. The rail moves a fork that actually executes the F or R gear selection. When the lever jumps out of the fork, it will move back and forth freely - but the fork is not moving on the rail. Hence you're stuck in whichever direction you were going when the lever popped out of the rail.
If that's your problem, remove the cover. I suggest you take this opportunity to make a new cover gasket too. Then reinstall the cover after repositioning the lever tip into the fork. Tighten down the cover bolts. Don't know about your 254 - but my 454 has a set screw that controls the depth of the lever in the fork. If you find one, loosen it. Push down on the lever till you feel positive contact with the fork. Move the lever slightly fore and aft to make sure you're actually inside the fork. Tighten the set screw
//greg//
Yes, I have the cover off. The finger engages the shift fork fine. It moves the fork just fine. I have verified this by shifting into F, removing the cover and checking that the fork is all the way forward. I then put the cover back on, shift it into R, remove the cove and again verify that the fork is at the full rearward position. When I put it into the F position, everything works fine. When I put it into R ab=nd start to let out the clutch, the engine will stall as if the transmission is locked up.