I bet your shift linkage needs adjustment
Ok -Never played with that particular engine, but here is my guess.First off, have this corrected before you use the engine again or you may destroy your lower unit. For those of us with brand new engines from companies that don't exist anymore, at least not for waranty purposes (read: OMC) this is a big concern.Next, it could be your shear pin. I broke the one on my little 3.3 dink engine and got a similar result to what you describe. The reason was that there was enough pin sticking out to engage the prop at low power but it would slip when more power was applied. I think I had this result because that engine has a plastic prop.Here's what I think is up, though:Your prop is attached to a shaft that ends with a bevel gear in the lower unit. (OK, so it ends with a bearing, let me be simplistic for moment). The drive shaft from the motor has two bevel gears, one with the bevel facing down, and one with bevel facing up.When you throw the shift linkage, you move the drive shaft up or down (there is a splined section that allows this) and one of the bevel gears engages the gear on the prop shaft. Since one will engage from the bottom, and one will engage from the top, depending on which way you shifted, the prop shaft will spin in either forward or reverse, even though the drive shaft is turning in the same direction.for the outboard mechanics out there, I know that there are sometimes more gears in a cage in the lower unit so that its stronger, but this is about right for the little guys. Anyway, if the shift throw is too short, then the gears will not fully engage and they'll slip. This actually tends to happen only in one direction, since what often happens is that the linkage is no longer centered correctly. At low power, the gears engage enough to spin the prop. At higher power, they don't.So - get the service manual for your engine and reset the shift linkage. Or, if you're risk adverse and not a grad student, take it to an outboard mechanic. What ever you do, don't use it again until you fix it, or you may get to see those bevel gears I was talkaing about up close and personal.