During the initial climb after takeoff, the pilot of the Cessna 402 observed that the nose landing gear had failed to retract. While orbiting clear of the airfield, the pilot commenced troubleshooting and found that the hydraulic system circuit breaker had tripped. After resetting the circuit breaker, several further retraction attempts failed to resolve the problem. The pilot then attempted to lower the landing gear using the emergency function. These attempts were also unsuccessful. After briefing the passengers on emergency procedures and with RFFS in position, the pilot commenced the landing with an unlocked nose gear. During the approach, the pilot shut down both engines and turned off the fuel. He then realised that the aircraft would land short of the runway. The aircraft came to rest 10 metres outside of the airport boundary fence. The pilot and passengers were uninjured. Engineering inspection of the aircraft revealed a wire in the electrical loom to the left main landing gear which had shorted to structure. When a selection was made with the landing gear selector lever, power applied to move the electro-hydraulic shuttle valve from the idle position to either up port or down port would pop the circuit breaker. This prevented the nose gear from completing the cycle to the fully down position and also prevented the return of all the gears to the up and locked position. The emergency blow down bottle was removed and examined. It was found to require a force well in excess of the maintenance manual requirement to operate the mechanism. These two defects prevented the landing gear from being locked down.