JD 301D hydraulic problems

I was asked to have a look at a JD 301D tractor (think 1960's!) with a front end loader at a kids camp near here. The operator got it stuck in the creek and it was a few hours before he got pulled out. He continued to use the tractor until the maintenance man told him to stop using it until he could check it out. There was water in the rear end / transmission. He drained the oil and added new without flushing the system. The oil was milky but the operator continued using it through the past summer without incident. On a cold day this winter, he plugged it in to move some snow and when he started it up, "there was oil all over underneath and a big chunk of something was laying on the ground", ( the operator is not very mechanically astute). That's when I was asked to have a look at it. The bolt holding the transmission oil filter canister had broken and blown the oil out the filter housing. I assumed the milky oil had frozen up in the filter and the pressure was a little too much for the bolt. I replaced the bolt and filter, put in new oil and started the tractor when the weather was much warmer. Then I noticed a bad leak on the suction line to the hyd pump. It looked like a frost rupture so I removed the line and brazed it up . I again started up the tractor and the hydraulics worked off and on for a few minutes, then nothing. The oil level is full. I have a manual for a similar JD tractor and by looking at the circuit diagram saw the transmission pump charges the hyd pump and the tractor brakes and shuttle work off this low pressure circuit. Since the shuttle and the brakes work properly, I assume the transmission pump is working. But there is no power steering or loader action. I pulled the stroke control valve in the hyd pump, thinking broken spring or? but it seemed fine. I also pulled the little filter before this valve and it was clean. Next thought was a broken shaft or sheared key so I took off the pump drive coupler. The pump shaft was tight and when I turned the drive, the pump pistons move up and down. When I turned the motor over with the stroke control valve out, the oil poured out of the valve body so the transmission pump is getting oil to the hyd pump. I'm stumped! I plan to talk to the JD mechanics at the local dealer on Monday but I figure there is a wealth of experience here and if anyone would care to wade in with your thoughts, I would be very grateful. Thanks in advance.