popping out of gear is usually due to a worn bearing. I had that problem on two different SM420s. One popped out of 3rd on decel and the cause was a worn clutch-gear bearing. The other popped out of 2nd on decel and the cause was a worn output shaft bearing.

Given your situation I would prepare to pull the trans apart and fix both problems. I would order bearings from one of the bearing houses rather than buy a kit. I think you'll get better quality bearings that way. Also check the u-joint yolk for loosness on the splines and a groove from the seal. Use a speedy sleeve to fix the latter. Replace the yoke to fix the former.

1951 3800 1-ton
"Earning its keep from the get-go"
In the DITY Gallery
1962 261 (w/cam, Fenton headers, 2 carbs, MSD ign.), SM420 & Brown-Lipe 6231A 3spd aux. trans, stock axles & brakes. Owned since 1971.