89 Merc 2 stoke 25hp won't tilt

Shift it into forward without it running and see if it'll tilt. Those motors have a locking mechanism that keeps it from kicking up when in reverse, but if it's out of adjustment it might be grabbing in neutral too.

Let us know how that goes and if it's still not working I'll post a few more things to look at.

 

Ok, you're sure there isn't a horizontal pin that the tilt lock hooks onto? The lock itself should have a couple of hooks on it that move up and down when you shift. Try raising the lock manually with your finger or a screwdriver and see if it releases. Maybe it's just not lifting far enough.

Here's a diagram out of the service manual that shows the lock. It's identified as part "D".

 

If you are sure there is nothing mechanically designed to stop it from tilting then use some penetrating oil to help break it loose. I'd thin some ATF fluid with acetone and then carefully heat up the joints in question with a heat gun (don't burn the paint) brush on the mix and let sit for a day. Lather, rinse, and repeat as needed. Had to do the same on a 6hp Evenrude recently. BTW that ATF thinned with acetone is one of the best perpetrators I've found and cheap too.