Hi PRG,

If you have checked almost everything... there's just 1 more thing you could checked and i suspect.

Checked the 2 speed shaft ain't bend (due to hard crash) by rolling it on a flat surface. (Since your car had 8 weeks of runtime).

If this is ok, check the 2 bearings on the Rear Bulkhead holding this 2 speed shaft.

I had this 2nd Gear stripping issue once, but on a different car (not a Mugen and 1/8th scale ). The problem was the 2 speed shaft worn out on where it rest on the bearing on the rear bulhead. Realised it when i dis assemble the 2 speed shaft out.

Good Luck !