How are you checking the oil? The PTO dropping out after a little bit of running suggests to me that you are checking the oil level without having the engine running. When a hydro runs it fills the hydro section of the tractor completely full of oil. The oil pickup tube is between the rear axles. If the oil level is at the full mark with the tractor not running it will be seriously low while in operation. That could explain both of your problems.
To check the transmission/hydraulic oil in a hydro the engine needs to be running for at lease two minutes before you check the level.
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Today's Featured Article - Pop's Tractor of Gold - by Gary Teate. My father was a simple man but could repair just about anythin mechanical that was ever made. From the time I was a young boy growing up in Jacksonville, Florida, I would spend a considerable amount of time helping my father repair or rebuild equipment and engines, etc. on our 2 1/2 acre "spread". Pop always dreamed of having more acreage out in the country where he could retire and tinker as much as he wanted and often reminisced about his boyhood days on his grandfathers farm in Montecello,
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