frozen gear selector on 1300 - anyone shed light?

My humble opinion. Based on your observations and efforts, there is a lot to consider, the rust on the shifter spline is alarming in that it was exposed to water and its inner workings may be as well. You might want to pull the clutch cover and inspect the plates for rust and wear.

So its in neutral, engine runs etc. what did the old oil look like when drained?

Also the clutch slave may well be crusted and corroded. Sitting years without service that long it will need to be replaced. Along with brake system full bleed of calipers and the SMC(it may be failed too).

Anytime the transmission fails like that indicates some form of damage. Suspect it may need to be disassembled. I hope you have a shop oem manual - if that bike were in my shop - its going to be a serious breakdown and inspection.
 
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