Is it possible the bike is stuck in neutral? You said the gear shift indicator shows the different gears but could that be misleading. I'd try lifting the rear end up and spinning the rear wheel while shifting the tranny up and down to see if there is any change in gear noise. Should happen as different gear sets are locked. Again, I'm in guess mode and am really intrigued by this failure. Seems like something snapped or is hung up. For the clutches to suddenly fail, as Kevin stated, you should get some kind of dragging at least with clutch released.
Another possibility, is the hydraulic clutch activator hung up in the release mode forcing the pressure plate to stay released????