Though the problem is 'solved' Id like to voice my thoughts......
First off, why do you keep your bug in gear?? I guess the handbrake is not working?? Suggest to get it fixed asap as its a vital safety feature. Let us know if you need any help.
Some causes of a sticky gearshift lever would be:
--Incorrectly adjusted shift lever. A guy who knows VWs can do this for you. Make sure the two bolts holding the lever in place are not loose.
--Lack of grease in the shift lever mating area.
--Worn shift lever nylon bushing. Goes beneath the lever on the horizontal rod. One of the most tricky parts to fit onto a VW, so dont even bother asking a local ustaad as he is bound to screw up.
--worn rubber bushings at shift rod coupler under the back seat. A pair of rubber bushings go inside a metal cage here on the newer models.
--A low gear oil level in the cogbox and/or dirty/water contaminated gear oil.
I suggest very strongly that you get the three bushings changed, whatever their condition is and get your gearbox oil drained. If at all your bug has been submerged in the recent floods, you may be having water mixed in the gear oil.......a great recipe for disaster. If the drained oil has *any* traces of water or looks like a creamy mess, do go for flushing of the 'box followed by fresh oil of the correct rating.