You need to take out 1 of the springs that forces the handle over. The Dedenbear instruction made that very clear. If you bought a different C02 they probably didn't know. Same thing happen to a buddy of mine took it apart at the track removed the spring his has worked perfectly every time important on a 7.50 car.
I am having the same problem (shifting 1st to 3rd) with the Cheetah SCS shifter, CRT RMVB and C02 shifter in the Daytona. I just read and re-read the instructions from Dedenbear and Turbo Action and I see nothing about removing a spring?