" Put in kerosene and drove around,turn pto and raised up and down several times,Drained again got more dirt.Took inspection plates off and sprayed parts cleaner on system and tried to get most of the sludge out. "
Not only did you waste your time trying to clean it like that, you could have harmed the pump & the bearings in the rear end & transmission. Kerosine does not have sufficient lubricating properties for the pump, rear end & transmission; they all share the same sump.
When the N lift is jerky coming up it means that one or more of the four pump cylinders is not pumping. It can be caused by broken springs in the pump chambers or a broken Scotch yoke in the pump that the pistons are attached to. Either one means the pump will need to be removed from the tractor to fix it.
And when you pull the pump, clean it out.
With all of the fluid drained out, block the front wheels & get the rear wheels up at least a foot. (you'll see why soon enough) Remove the 4 bolts holding the PTO shaft in & pull it to the rear & out of the tractor. Loosen all of the bolts. Remove all but 2 corner bolts. Then, carefully remove them. If you are lucky, the pump will drop free (and dump a pint or so of hydraulic fluid down your sleeves). If not, wrestle it free. The pump has 'ears' that fit into the housing; wiggle it a bit & it will drop free. If you have the rear tires a foot or more off of the ground, you will have enough arm room to hold the pump & lower it at the same time. Put it on your work bench & remove the safety valve (p/n 638) and the control arm lever (p/n 643) which will allow you to remove the intake & exhaust valves (p/nís 640 & 698) Drop all of it in a bucket of diesel (or mineral spirits) or your parts washer & let it soak overnight. Once it has a good soaking, get it on the bench & start blowing it out w/ compressed air. Run cleaning fluid into the hydraulic discharge near the test port & make sure you get a good flow out the small hole in the side of the pump were the control valve fits. I don't see much need to pull it down any further just to clean it. (in order to see why it's jerky coming up, you will need to pull it down further than this) But, I always replace the safety valve (p/n 638, about $25) Reinstalling the pump is harder than pulling it out because you have a gasket to worry about. (no sealer on the gasket) And, you will probably need a helper to guide the control rod into the pump rocker shaft unless youíve done this 6 or 7 times before!
While you have the PTO shaft out, it would be a good time to replace the seal on it. It's got two spring clamps around it. Take your needle nose pliers & remove the one in the front. Then, hang the shaft & bearing housing in your vice & tap the butt end of the shaft; the bearing cap will come off (and the shaft will land on your foot). Then, remove the other spring clip from the other side of the bearing. At this point, remember that you never bought a seal driver & go get a BF socket & drive the seal out. If you have the new style seal, the white side goes out. (open side to the oil) Put some grease on it.
Contrary to conventional wisdom, not a lot of water gets in the oil from the shifter boot. Of course, if it's bad, replace it, but you get water from the draft control spring & the dipstick. But, most water is just a byproduct of the heating/cooling cycle of the oil.
Youíll need a pump gasket, safety valve, inspection plate gasket(s), PTO seal, PTO gasket, gasket sealer & 5 gallons of fluid to do all of the above.