Is there any significant rust on the cylinder walls?
Do all of the pistons move up or down when you move the crank back and forth?
The transmission (which is a 2 speed by the way) shouldn't stop the engine from turning at all, just the rear tires.
I would look for a broken connecting rod or perhaps pull the dust cover off of the bell housing and look in there for something loose. I saw a oil pump on a ford transmission once that broke and made the engine difficult to turn over, but thats not common. Since you have the oil pan off, maybe take a flash light and look in there for anything out of place.
keep us updated, and feel free to post some pictures of your car
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