Mine moves pretty close to 1/2" forward and 1/2" back, that is the forward reverse shaft going into the side of the trans/bellhousing, measured at the pin.
Have you checked the fluid level? I think it's the angled hex head plug on the side of the trans, separate from the trans oil which is checked from the dipstick.
Otherwise, it's a matter of eliminating the other possibilities besides the reverser before tearing into the reverser. So check that the flex plate is intact, through the starter hole, or remove the brace that goes over the bottom inspection hole and see if moving the torque converter moves the flywheel. Does your differential lock work? long handle on the right side of the seat, pull back then try to drive. Do you get any grinding of gears when shifting the two gear shifters? try it at idle, then rev a little forward and backward while shifting and see if there's any clanking at all, like something is trying to turn without load.