That sucks! It may very well be the gear dogs worn if it's getting a full engagement during the shift and no other gears are having issues. Make sure it's not the clutch but they usually show up in the higher gears.
Might have bent a shift fork early on and now it's got the dogs worn down. It will likely need the undercut job we do and new forks/shift drum. Email me directly and I can send info on pricing and options (a few on here have had our overdrive installed when doing the trans work).