RE: gears ar'nt kicking in
If the engine is revving and the drivetrain isn't engaging there is either something wrong with the clutch, or the 2-speed assembly.
It may be that the 1-way bearing in the 2-speed tranny is slipping, so when it changes down from 2-nd to 1'st the drivetrain loses power, but the engine revs. Check there is only a very small amount of oil in the 1-way, and that it does not slip on the shaft. You may also want to check the 2-speed hub for wear.