Am no expert
But sounds to me like something is wrong with the clutch.
"To control the clutch it is desirable that some means be provided to be readily accessible to the operator and with this in mind a clutch shift lever 42 is pivoted at 43 in suitable bearings 44 on the cross bar or member 11 so that the forked end 45 thereof embraces the clutch sleeve 41, bearing lugs 46 being provided to fit within the groove 47 of the clutch sleeve. This clutch shifting lever 42 can be moved to the two extreme positions illustrated by the full and dotted lines illustrated in Fig. 2 and will throw the clutch in or will throw the clutch out, as'desired.
To permit manual operation and setting of the clutch I provide a clutch shifting rod 4'] slidably mounted in one of the legs 2 and a clutch shifting handle 48 on this rod 47 is disposed to be readily accessible from the outside of the encasing structure 49 which is ordinarily used to enclose the tub or container 1. A fork 50 on clutch shifting lever 42 is received around clutch shifting rod 47 and springs 51 and 52 are provided on opposite sides to stabilize the clutch shifting lever as rod 4'7 is adjusted. To hold adjustments of the clutch shifting rod 4'1,- an arrangement as illustrated in Fig. 10 may be used, and as here shown the handle 48 extends through aslot 53 I and the rod may be engaged in notches 54 and 55 at its two extremes of movement. Any other approved structure might be employed to operate the clutch shifting lever and retain adjustments of the same.
In the use of my improved mechanism the motor 10 will constantly drive shaft 29 and consequently drive gear 2'7 will be continuously rotated, a direct connection being accomplished vto wringer shaft 36 through gear 35. As the drive gear 27 is rotated, pitman rod 38 will be constantly actuated through its eccentric mounting between the two extremes of movement as illustrated in Figs. 5 and 6, and arcuated rocking lever 18 will be correspondingly rocked. This will cause the two links to be alternately wound and unwound around the stub shaft 13 as a center, in consequence of which the bifurcated arm 22 will be swung to oscillate driven member 14 through greater than 180 degrees of movement, the actual movement thus attainable with efficiency being substantially an oscillatory movement of 220 degrees or better. As the links 18 and 24 alternately wind and unwind around the stub shaft 13 there will be no interference of any part with another part and in consequence a smooth, even, oscillatory movement will be imparted to member 14 continuously-during operation of the rotating gear or member 27. Through manipulation of the clutch sleeve 41, the agitator shaft 4 can be readily connected and disconnected at the will of the operator.
With thisconstruction and arrangement of the parts, the mechanism is extremely simple and inexpensive to manufacture and assemble, there being no special crank shafts, racks, or gears associated with the agitator shaft, and as all of the parts can be cast and finished according to ordinary manufacturing processes, a much simpler and cheaper structure is obtained than where racks, gears, segments and the like are required. Further, as cylindrical bearings and corresponding openings can be finished and fitted with extreme accuracy, 9. very smooth running and quiet operation mechanism is provided. "
http://www.google.com/patents/US1964440
With the control knob set to "On" see if you can nudge the gear into place.
SQ had a lifetime warranty on their wringer washer transmissions and about the same on the clutch system. Both were tested under stress and designed to last lifetime of the machine. Thus it would seem odd a fairly low use machine like yours would have stripped gears or whatever. Am still guessing something was knocked lose or is gummed up.