It's doubtful the hydraulic fluid is transferring into the engine. I'm not aware of any connection between the two. Your engine oil rising is more likely fuel. You need to monitor that closely, since fuel diluted oil can be a major problem/expense if not soon corrected.
The loader/valve problem could be any number of things. I've seen all manner of plumbing arrangements on John Deere tractors of that vintage when it comes to operating a loader. How your is set up needs to be explained before much help can be offered there. Is there a dedicated loader valve? Is it supplied by a remote valve or is it tied into the system? Is it a closed center valve? Maybe the loader is operated strictly with the factory remote valves through the couplers on the back. ????
The dif lock issue could be as simple as stuck/rusted linkage. Does anything move either way when you try to operate the pedal?
The loader/valve problem could be any number of things. I've seen all manner of plumbing arrangements on John Deere tractors of that vintage when it comes to operating a loader. How your is set up needs to be explained before much help can be offered there. Is there a dedicated loader valve? Is it supplied by a remote valve or is it tied into the system? Is it a closed center valve? Maybe the loader is operated strictly with the factory remote valves through the couplers on the back. ????
The dif lock issue could be as simple as stuck/rusted linkage. Does anything move either way when you try to operate the pedal?