Thanks, Jerry.

I did a bit of searching and found this:
Old Car Manual Project

So, it looks like I am basically in for replacing the Ring Gear (capitalized because they cost so much) and of course with it, the pinion. OUCH!

HOWEVER,

I did see this:

Quote
IMPORTANT (2-SPEED AXLES) Electric
shift unit replacement. Before installing a
rebuilt or new shift unit, check fit of shift
fork to slider block pivot using a "Fit-Up"
Card or Template (P/N 128039.)

Is it possible that there is something in the shift fork (pivot or arm or something else) that can be adjusted or replaced?

It does seem like the problem is deeper as it 'acts up' when power is applied, but I am still hoping against hope to find something simple [read: low cost] to make this thing workable.