It's been a long time, but I will recall what I can. That set up was the major problem with those tractors. The PTO clutch system, if left with the lever latched to the rear, would push the crankshaft forward through the thrust bearing, until major engine damage resulted. That's why they offered the retrofit, external, front mounted, Timken, greasable thrust bearing.
As I recall, you were supposed to be able to pull the PTO clutch lever back, with the engine running, pull up on the PTO shifter to engage the drive line, then release the clutch lever forward, engaging the PTO. As I remember it never worked that way, without grinding the shifter. And as I recall, you couldn't start the engine with the PTO shifter engaged, because of a safety switch.
You could have any number of problems, with worn linkage, clutch, bearings, cable, etc. Anything hooked to the PTO ought to offer enough resistance to stop the PTO. If you're fortunate, some adjusting might remedy the situation. If I had kept the tractor, I would have bypassed the safety switch on the PTO shifter, so that I could start the tractor after pulling the clutch back, and engaging the shifter. Then I would still use the clutch lever properly, leaving it forward as much as possible. I wouldn't be trying to start the tractor with the PTO engaged and hooked to an implement.
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