I'm going to include a parts breakdown of your drive system so that we can refer to item numbers and not get confused between terminology. First your friction wheel (2) does not contact the drive plate (1) until the handle is held down, so that is your first check. It is the drive plate that moves toward the friction plate when you press down on the drive handle. Once the drive plate makes contact with the friction disc the friction disc turns the hex shaft (14) with the small gear cut into it. That hex shaft gear turns the large gear (15). The large gear is held in place on the drive axle (38) by a woodruff key (10) without this key the large gear will only spin on the shaft and not turn the wheels.
From your description it sounds as if the hex shaft is locked up on you. There is a bearing on either end of that shaft (26) that allows the hex shaft to spin free. I would suspect that they are frozen up on you and need to be replaced. They are fairly simple to remove, the right side is held in place by an E clip (13) and the left side is held in by a nut (8) Simply remove the nut or clip and work the bearing out of the housing
I hope this helps, I am hear to answer more questions if
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