For the past several years we have had to bleed the air out of the top cylinder. Now it is getting worse! At times on start up the hydraulics will not work, wait or leave the cylinder high and lower after startup and it seems to go. Lot of air in the hydraulic oil, where is it coming from..forklift has not leaks Rick
You have a leak in the pump suction line, either a loose clamp, a crack in the hose (seen many that will pull air in but not leak oil), or a bad pump shaft seal. Although pump seal leakage usually results in hydraulic oil in the engine, I have seen where it will also pull air in. You will need to inspect the line that leads from the hydraulic reservoir to the pump.
On a C500, if your having to bleed air out of the lift cylinder(top cylinder?), the lift cylinder needs to be rebuilt. It has a telescoping lift cylinder that is finicky. Lots of different problems arise from bad seals on this cylinder, sucking in air is one of them. The seal will move one way, letting air in, but when pressure is applied, it rolls back into place and seals. It's the seal with hydraulic fluid on it, making it wet but not flow out onto the ground. If it is the lift cylinder your talking about, have it rebuilt. Beware though, it not a cheap one.