Could be the control box (under the dash) or linkage adjustment/operation (at the dash, link rods and on top of the transmission).
Did you go through all the adjustments...check the control box on the dash, verify the links work to the transmission (especially on top of the transmission) and
the operation of the transmission?
Below is a link to a series of pictures of the control box internals:
http://www.toro.com/en-us/parts/Pages/PartsDetails.aspx?mybeid=3157&serialNumber=9000001&modelNumber=38573&searchTerm=9lzIRv+p5zdBreKrSjntrqk1euAjhzMXD7k337xcR1zbDBmmaPLuLD5dPkjGpBZM&defaultTab=parts
Below is a link to a power shifter service manual.
http://www.scribd.com/doc/26159544/Tosnowps-1-Copy
There is a trouble shooting section on lack of reverse, how to set the traction chain tension, and big sections on the dash control box, adjustments, linkage interaction with the transmission and transmission internals.
From page 49 of the service manual:
Reverse Cable Adjustment: Adjust the reverse
cable so that there is 1.5 mm (1/16") side play in
the reverse bellcrank as shown in Figure 43. If the
cable is too loose,loss of reverse will result.If the
cable is too tight, loss of the forward gears will
occur.
This message was modified Feb 21, 2015 by trouts2