They are scored.----Motor has to come apart !!-----Reed valves have nothing to do with this issue either.-----Looks like some metal bits were bouncing around in the top cylinder too.----Take this motor apart now.----Keep running it and all hope for repair is gone.
That impeller / pump housing was used on the bigger outboards from about 1964 to the late 1980's ----And on the stern drives as well.----Shame on any shop that does not have that item in stock.----Or knows how common this item is !
??----Was it still your lower unit on the motor ?-----Was it in " secure storage "-----Nothing could have happened during normal storage to loose forward and reverse.
Are throttle plates moving , yes or no ?----Are throttle and shift cables hooked up correctly ?-----Or perhaps there is an issue inside the control box.
Disconnect some hoses.-----7 screws hold the power head on.-----Lift it off so you can take the 2 nuts off the SHIFT ROD.----Not really a difficult job.