Not knowing the performance capability with the gear hanging out in the breeze, if it won't retract fully, I would be inclined to go with the OEI escape procedure.
Some types have an over ride to bypass the squat switches, and if this is the cause of the failure to retract, it is probably reasonable to use that function - though I would consult the QRH first.
The worst case is when one or more gear legs unlock but don't retract - obviously not a squat switch malfunction but something potentially more serious. In this situation as for whether to attempt to recycle the gear, that's probably type specific. Generalising, again not knowing your type or QRH, I suggest the safest course would be to select it down again and return for landing, or if you need to burn fuel and have confirmed that the gear down performance meets en route criteria, carry on to another more suitable airport.
The party poopers may then say "but wotif you now have an engine failure?". To which I would suggest that we don't assume double failures - if we did no twin and I suspect not many four engine types would be allowed to fly!
Last edited by Mach E Avelli; 21st Jan 2014 at 06:02.