What makes you sure it's the gearbox? Sounds more like a plain old piston seizure to me. A gearbox seizure would be very weird. I've never seen one of these gearboxes fail in any way, and I've thrashed them thoroughly. Note that the 125 uses the same box as the 185, and THEY never fail. Terrible oil might cause a problem, but it's unlikely.
Pull the barrel off and have a look - if the piston is anything but perfect that's probably it.
You can remove any aluminum off the barrel with a little hydrochloric acid, and a light sanding with 240 or so wet dry sandpaper. Wash very thoroughly with gas.
Take a fine file to the piston seizure marks and gently file them off, working around the piston, not up and down. DO NOT sand the piston.
You'll usually find that the seizure marks are on the "corners" in relation to the wrist pin. Just file what you need to get the worst of the marks off, no more.
Note that they shouldn't seize, it's very unusual for them to do so, so something is wrong.
Be sure you are using the right plugs - BP7ES normally, BP8ES in hot / hard driving conditions. Also make sure you have good 2 stroke oil. If not, adjust the oil pump up a bit. Also check the plug colour - if it's white or light tan the main jet is wrong, too lean.
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Grant Johnson
Seek, and ye shall find.
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One world, Two wheels.
www.HorizonsUnlimited.com