I haven't taken one of those 4 speeds apart but my guess is it's a roll pin that has sheared off of the shift fork - you may be moving the shifter and feel something but it truly is staying in neutral because the shift fork itself isn't moving. If it's not that, it could be a broken shift fork, missing teeth on the reverse gear itself, shifter issues........... hard to say. My money is on a broken roll pin since you say it just disappeared. Very easy & cheap fix, but you may have to pull the transmission and/or partially disassemble it to fix it unless you can get at it with the pan removed. My guess is you can't but I could be wrong.
What you have now is by far the easiest thing to use but you could swap in an FM-145 or 146 if you can find a 4 cylinder bellhousing for it (though not much of an upgrade) or a 4 cylinder M5OD from '88 and up trucks... those are very hard to find or you can custom build one with parts from 4 cylinder 2wd and V6 4x4 donors. In any case you will be looking at driveshaft length changes, using different clutch/flywheel/starter parts, and more than likely your transfer case shifter will need to be modified.