I plan to stop back and talk to the mechanic. The tractor was at the dealer for about 2.5 weeks. Two issues were looked at the same time, one for cruise control and the other for the 3pt hitch. On a prior visit, the dealer told me (after contacting kubota rep) that this was normal behavior for the hitch. I didn't agree, but took the tractor home. This time, I sent a request from kubota's website explaining the problems I was having with the hitch and also a link to my before video. Within same day my dealer told me they heard from kubota and to bring the tractor back in. The dealer told me they had to fight with kubota saying it was indeed a problem and to be able to fix this under warranty. It was not an external adjustment. They had to take the top cover off the transmission and pull out the valve and adjust it.
The hitch is not perfect but much more usable. I did notice that there is very little resistance on the 3pt lever now, it feels silky smooth in the travel. Before, it had more resistance and took more hand pressure.