After trying another two shifters (two different brands) and finally going back to the newer Empi, I still have the same problem -that is when down shifting from fourth to third, it wants to go into reverse (grinds). But ... only when its moving. Standing still the lockout works great.
I believe the problem is when I cut the pan and the shift rod in 1967, I followed some very early instructions. The only Dune buggy's were Manx and Ocelote. The practice then was to cut the rod so there is no bend. Later years they said to retain the bend.
I'm just going to have to drive it the way I always have, that is; down shift by out of fourth to neutral, pushing left then move it to the right a smidgen, and pull down very lightly and hope for the best.
I also gassed-up the Buggy and cleaned her up for the parade. UI*USflag