In my experience, usually when the shifter fails it's because a spring or pawl breaks and the shifter won't move the cable; the shift lever will move, but it doesn't pull any cable and it has little or no resistance on it. This can also happen when the factory grease turns to a substance resembling taffy, but that usually occurs only after the bike has sat for an extended period (usually a year or more).

In your case it sounds like something may be jamming the shifter. It is possible that what has happened is that the shift housing itself is coming apart and the wires in the housing are protruding into the shifter, thus biding the shift wire. I've seen this a few times on bikes with old or original shift housing. On one bike I found that the wires from the housing had forced themselves well into the shifter, so they not only bound up the cable but were jamming the shifter mechanism as well.

So you might want to check the shift housing at the shifter. You can do this without unbolting the cable: shift the rear derailleur until the chain is in the largest cassette in back. Then, with the bike stationary and without moving the rear wheel, "upshift" the shifter all the way. This puts slack in the cable and will let you pull the housing away from the shifter a centimeter or so without unbolting anything. If you see any wires other than the shift wire coming out of the housing ferrul, you've found your problem.

Good luck.