I checked the hyd/tran oil level by opening the fill level plug (soooo conveniently located!). FEL, 3 point, and steering working well. I remember that when I asked the PO if he had recently checked the oil level he said his mechanic said that "if you open the the fill plug, stick your finger down there and you should fill it till you touch oil." That didn't make sense since I saw the height difference between finger level and the level plug, so I opened the level plug and 10 gallons of oil came out.
So I got past my bad thoughts of him and now I am wondering if there should be more oil than the level plug indicates because of the FEL. I am getting some minor squeeling from the steering that I didn't have before. Should I add an extra gallon?

they are dual action cylinders and there is an engine pump. No water came out...the oil was actually reusable. I am going to add another gallon and see what happens.

Just wondering if more oil is needed because of the lift cylinders= more volume

If hydraulic cylinders have two hose plumbed to a cylinder little change would be seen in oil level from retracted to extended unless the cylinder rods are a bigger diameter than normal. One other thought is the suction pickup has a leak and they overfilled to keep air from entering the pump.

If I remember correct the 504 tractors could have a engine driven pump or internal housing pump. Thinking you must have a internal pump in the center housing as you describe checking the oil level. If so and the loader is operating with lift cylinders vented on one end the position of loader could effect the oil level. Not way over filled though.

I check the manual it doesn't say how much extra oil or if extra oil is needed for a front end loader

Two comments, take them with the idea that I do not know that tractor. The finger in the hole is usually to find the minimum oil level, not where it should be. Which is in most cases just dripping from the check plug. Overfilling (if not leaking) is OK.
Have you determined that it had no water in the system? If it has Hytran brand oil in it it would look milky. if other oils, the water could be filling the bottom of the housing. To check for water, the drain plugs (one at a time) are loosened to the point of leaking to see if water comes out instead of oil. Jim

Before you operate the tractor, and doing so causes damage, find out if the hytran level, and amount are actually determined by that plug. that seems to be an excessive overfill, or the wrong information on checking the level. Third hand information is suspect. The tractor is unique enough to have an owners manual. Jim