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Why does smoke come out around gear shift on John Deere 310 Backhoe?

Backhoe Deere Gear John shift smoke
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Why does smoke come out around gear shift on John Deere 310 Backhoe?

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Test drove a used backhoe about 200 yds and noticed smoke coming from around the floor mounted gear shift. Also had burnt smell. I immediately parked the unit. Everything else seemed to run fine. It’s got a great price. But, I’d like to know more about what I would be getting involved in. When driving in first gear and pushing in the clutch, I was unable to shift to 2nd or higher. The gear would just grind. I had to stop, put in neutral and then put in 2nd.

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