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The problem is a bent shift fork. The repair is major surgery on the transmission. The entire engine comes apart just to get to the forks. Some special tools are required. The generic diagram below shows how the shift forks work.
The most common problem with the 1989 fzr600 is the fact it is 22 years old. Getting parts is usually pretty hard to do. As an experiment, try finding a shift fork, gasket kit, and 1st oversize pistons and rings for that bike. What 'ya gonna do when a bent shift fork happens and you can't shift out of first gear? Also, who will fix it? Most dealers won't work on a bike if it is 10 years old or older. It goes back to parts availability. Please rate my answer.
The bike has some bent shift forks. The repair is pretty major and requires some special tools. I include a generic diagram to show how the shift forks move left and right to move a slider gear into different gears. Please rate my answer. Thanks!
If the kick starter operates normally the likely cause for a transmission lock up is bent shift forks. The bent forks are trying to engage two speeds at once i.e., 2nd and 3rd at the same time. A broken circlip on a tranny shaft could also cause the dual engagement. If the starter is locked up the problem is likely to be a broken retainer clip. There is a possibility that the cam chain may have broken and is wrapped up on the crank gear. Is there oil in the gearbox? The engine may have seized up do to a lack of lubrication. You can see a diagram of your entire engine at the site below. > Please rate my answer
The popping noise is gear dogs trying to engage a gear. You did not say that the bike doesn't shift smoothly so I would tend to rule out a bent shift fork. The neutral stopper pin may be worn or the stopper spring or other springs may be broken (see diagram). Another possibility is a broken stationary gear circlip which would let the gear wander a bit on the shaft. most the parts are available at Babbitt's. Go to www.babbittsonline.com/parts/viewbybrand/parts.aspx
The bike has a bent shift for or two. The engine will need to come out of the bike and get a complete teardown. A shift fork moves a "slider gear" left and right on a shaft. Both sides of the slider gear have "dogs" that engage into the side of an adjacent gear. This is how the different gears are engaged. A bent fork will not slide properly or engage properly. It is a costly repair. Note that if the inspection reveals a broken gear tooth, the smooth shaft that the shift fork slides on could be bent, and/or the gear shafts could be bent as well. Can I get a “very helpful” rating on this answer?
It could be a loose shift index wheel or a weak index wheel spring. The index cam could be loose also. Another item to check is the shifter shaft and return spring. There could be a slightly bent shift fork causing the problem, but since you didn't mention having to force the shift pedal I doubt that is the cause. By the way, if a shift fork is bent, an engine tear down will be needed.
If you mean that you can't shift into any gears from neutral then you have a bent shift fork. Did you strike a small tree on the left side of the bike while riding in the woods? Bumped the gearbox on a large rock? Is the foot shift lever bent at all?.... Replacing a bent shift fork is easy if you have the special tools and the know-how to do it. Most riders would shy away from attempting it. You would need to remove the engine then tear it down into about 75 pieces to get to the bad fork. Check the gear sets operated by the bent fork. If gear dogs are broken then it is best to replace the broken gear and the gear it engages with.
You have a bent shift fork. The repair means removing the engine from the frame then tearing it down into about 75 parts which will then allow the bent shift fork to be replaced. This is not a job for the amature mechanic. Wish I were there with you to guide the repair.