Re: rear wheel not engaging
Take the intake manifold off and check to see if the gasket has been properly cut out.
Someone else here had the same symptoms as yours and they found that their gasket had the hole not quite punched out, and the paper slug was blocking off the intake.
If the intake checks out, check the exhaust system for blockage.
Sounds like your clutch might be slipping, check for some slack in the cable.