Thank you for posting that diagram. I'm not really mechanically inclined so I have a few questions, if they seem stupid please be patient!
When the handbrake is engaged, does it lock both wheels? From your diagram it appears there is one 'brake assembly' that the hand lever activates. Is this brake assembly braking the entire axle so in turn both rear wheels can not move? If this is the case, then the hand brake assembly must activate a third brake assembly separate from normal left/right foot pedal brake assembly.
As stated in my OP, the hand brake lever should be free to travel because I have effectively disengaged the hand brake control rod (item 7) from the hand brake lever. In order for the hand brake lever to move, the hand brake lever shaft (item 5) must be free to rotate.
Would you mind looking at your book maybe in the gear box / transmission section to determine what the other end of the lever shaft (item 5 in your diagram) is connected to? It seems like the reason the handle will not move is because hand brake lever shaft can not rotate.
Thank you for the time and effort you are putting into this.
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