As for the engagement lever, I often slowly pull out on my cable a bit while holding light hand pressure on the lever until it engages. Remember, the engagement dogs only engage every 180 degrees of drum rotation. Since your cable is bound, you will need to rotate the input shaft several turns while holding the engagement lever over to engage, until it does engage. Then you can hand rotate the input shaft to turn the drum in the direction needed to unwind your cable.
Also, understand that the lever on the winch simply engages and disengages the cable drum from the input drive. Don’t let the words “in” and “out” cast onto the lever confuse you. They refer to engagement, not drum rotation direction.
The PTO is reversible, that is how you run cable out and in. Always a two man operation.
As for the drum lock pin. Good chance it is sheared off. Pull it(remove it) out and see. It’s there to simply keep the drum from freespooling when you disengage the engagement lever. Most of the time they don’t work well or at all. The drum hole gets damaged from incorrect use.