Problem solved for the technically adventurous:
Remove the seat ( 4 bolts and a few plugs )
Turn the seat up-side-down.
For those of you who have had old 3 speed bicycles, this will all be logical.
The end of the cable that clips into the cog ( this is in the bottom of the red circle ), the last 3 centimeters are cased in a brass sheath bent to form a Z. Detach the Z. Re-bend it with 2 pair of needle-nose pliers to make a new hook. This basically shortens the cable by about half a centimeter. Just enough to make the cable work again. Hook it back in and everything works like new.
There is an old link from 2007 with lots of questions about seat mechanisms that don't work. This is a pretty simple solution.
