Bolo
I try give my best answer to your questiosns. Of course a lot depends on how much money your want to spend and what mods you are willing to attempt yourself...
<font color="red"> I want to put this grapple on a Kubota 723 loader. Should I upgrade to the heavier bucket, or is the 3/8" backing plate you made good enough?
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I would not get another bucket. If you are able to afford another attachment and have lots of brush work to do and you have quick attach on your loader you might want ot look at getting something like the Anbo root rake/grapple. If your intent is to go with the bolt on grapple to keep cost down and just have a "quick and dirty" grapple attachment for your existing bucket, then just bolt it on. Your bucket should be OK.
<font color="red"> My loader is not installed yet. Should I have the dealer run the lines or should I go elsewhere. One dealer quoted me $1000.00 for the valve and lines. This seemed high.
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You're right. That price seems high. You might want to get your dealer to just give you a quote to install an additional valve section on your loader valves or at least a power beyond kit so that you could install the hydraulic lines or a valve and lines yourself later once your ready to install the grapple. You can probably save some money this way. You can also get all of necessary parts yourself and do all of the plumbing yourself. There was a very good thread on TBN about hooking up hydraulics to angle a snow plow. You might want to check that out to use for the grapple. It will at least give you some ideas/options for your hydraulics.
<font color="red"> How much extra hose should I have them leave at the end. What type of control should they add to control the grapple? </font>
For my situation, I needed about 4 ft of hose to go from the loader cross brace where my quick connect outlets are to the grapple cylinder. What you will want to have is hydraulic lines ending in quick connect to some convienient location on the front of the tractor loader. You will just need to make/get hoses to go from there to the grapple making sure you give enough length to let the bucket curl through the full range. A simple direction control valve to open and close the grapple would be the most straight forward setup. If you look at the snow plow thread you might want to get a solenoid operated valve and operate the grapple with a push button on your loader joystick (a very trick setup indeed /forums/images/graemlins/cool.gif). Again, its a matter of cost, complexity, and your preferences.
Hope this helps some.
John