The rear passenger side seat belt is locked in place and will not extend. similar to if you were to move to suddenly and they lock. How ever it won't initially move at all.

Can this repaired or does the mechanism need to be replaced?

this might seem redundant but have you tried everything to pull it just a little further ? cause when they are pulled out to some extent they do "clic" and lock (safety seat for kids protection) so you normally just pull them all out and let them come back automatically.

The problem is it won't budge at all, it won't move and it's stuck in the resting posistion where it's wound all the way up.

If you can't push the belt back in to release the locking mechanism, you will have to remove the roller assembly. It may unlock when you remove it, or it may need to be replaced.