Before you take it apart you can do some troubleshooting. Remove the right side inspection cover, you may have to drain some oil out down to the lower bolt hole on the cover. With engine running, operate the hydraulics and look inside for leaks, keep your hands out of the inside while it is running. Using an inspection mirror you can look up at the lift cylinder and where the hydraulic pipe goes into the lift cover for leaks. If it is dropping that fast it could be the lift cylinder. You can also look at the oil to see if there is a lot of turbulence coming from the pump. Then when you shut it off you can look to see where it is leaking down.