I assume you refer to the trigger style shifter, I haven't looked at the ratchet pieces in a long time, but I suspect that Bicycleguy has put you on the right track. Hose out the shifter w/WD 40, disconnect the cable, and pull it manually while cycling thru all the gears. This ALMOST always cures the shifter of any problems. If the chain/rod at the hub has no alignment markings, simply cycle it into third, remove all slack from the chain/cable so that it has not yet moved, but will do so if the cable moves at all. If it does not lock into first AFTER you made the shifter work manually, check the cable to see if it can be moved any further by hand-pulling it, if so, then tighten it a turn or so at a time until it works. If it has align. marks, they are usually lined up in 2nd gear. The hub and cable, as mentioned, must operate freely as well, in order for the shifter action to have constant tension.