There is a metal to metal dog type clutch in the axle for the high low range. If the teeth on the clutch get worn, they tend to ratch and slip. Usually only in high. Sounds like thats were you trouble may be. You should not shift this lever when the tractor is in motion.
For the PTO, there are 2 speeds. You should have a second lever thats labeled 1 and 2. That shifter changes your wheel speed, and your PTO speed. It can be shifted without stopping the tractor.
This tractor uses the same transmission as is used onthe 2 wheel walkbehind Gravely tractors. same one as the Model L, 500 and 5000 series.
go to www.oldgravelys.net and you can download service manuals, parts lists, and a LOT of other useful information for your tractor and its attachments.
There are also a couple links there with a few places that can get you just about every part you"ll ever neeed, and ship anywhere in the country.