The cable operates both, so that wasn't the problem (as you found out).
The problem is inside the assembly, likely a broken plastic gear, or the magnet has fallen off of the drive wheel. The needle shaft itself could be jammed, but that's not very likely.
About all you can really do yourself is pull the cover (may not be possible) and see if the needle still moves freely.
I'd start looking on eBay for a replacement.
Part number is 25005-1654
The part does NOT appear to be common with the 1500 Classic, so it might be hard to find used.
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