Does the slave cylinder have a second line on it that goes up to the shift cover? If so, the hi-lo interlock is probably leaking the oil into the clutch system. Try disconnecting that line (it is the one on the end of the slave cyl) and plug the cylinder. Run the tractor and see if fluid comes out of the open line. I think there was a service bulletin to eliminate the interlock system but I don't remember the reason why. Someone with access to Deere service bulletins from that era could look it up for you.
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Today's Featured Article - Third Brush Generators - by Chris Pratt. While I love straightening sheet metal, cleaning, and painting old tractors, I use every excuse to avoid working on the on the electrics. I find the whole process sheer mystery. I have picked up and attempted to read every auto and farm electrics book with no improvement in the situation. They all seem to start with a chapter entitled "Theory of Electricity". After a few paragraphs I usually close the book and go back to banging out dents. A good friend and I were recently discussing our tractor electrical systems when he stated "I figure it all comes back to applying Ohms Law". At this point
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