Behind the end plate where the 2 main hoses attach there is a brass plate. This plate can get score marks on it which could be the cause of your problem. Unless you have a lot of experience as a fitter and know how to blueprint, it's a job for a GOOD hydraulic tech. If you remove and refit the motor yourself it should only cost a few hundred bucks and it should be like new. If the motor is buggered then ring around your Rexroth agents, you should be able to get parts to fix it though and still be cheaper than buying a new mulcher.:laughing::thumbsup:
PS There should be a control box on your mulcher which has a whole lot of valves in it. The rubber and plastic O rings that you found in the hydraulic system could have come from that, it would also pay to have it checked out, and pressure tested.