Joe,
You should also check that the nut on the rear end of the layshaft is tight, as a loose nut will let the layshaft work its way forward if the front end is not correctly shimmed. You can get to the layshaft nut after removing the gearbox final drive. Also, with the side cover removed, check the depth of engagement of the dogs for 2nd gear and 3rd gear. If 3rd gear engages deeply and 2nd is marginal, removal of some material from the rear face of the layshaft bottom gear (this will require grinding) will improve matters as it will move the layshaft - and it's dogs - back, giving deeper engagement of 2nd gear. Finally, the front end of the layshaft should be shimmed up so that any forward thrust is taken by the bearing in the front cover, rather than relying on the rear bearing retaining plate.
Eddie.