In case anyone wants to know, this is what happened:
See how the lower part of the selector fork is wedged against that dowel on the shift drum? That should never happen.
What I found out the 2nd time I had the case cover off was the bolt that allows for adjustment of the range of the selector fork was loose. There is a special Ducati tool that you put on the shift drum to line up with that mark on the selector fork, but I don't have one so I eyeballed it. It was way off when compared to the picture in service manual, I'm sure I have it a lot closer now.