Well, I got the front and rear wheels off the ground and ran it at varying wheel speeds forward and reverse for about 20 mins. I checked the fluid level before and after, it remained the same, full, clean and clear. Then I ran it mowing some of my lawn and overgrown pasture for an additional 15 minutes. It works much better than it did previously, less lurching, and lever flailing, a lot more grinding noise. When on level ground with little load in a straight line it works pretty much normally. Once you turn or place additional load on it, it makes a grinding noise, like your trying to shift a manual transmission vehicle into gear with a clutch that doesn't fully disengage, and then the levers jump around a bit. Also it doesn't respond to putting it in to "high", only "low" works. And the position where "low" is engaged is where it says it would be in "neutral". And the 2wd/4wd only seems to work in 4wd. Weird, I don't understand how all of these things could be related. Or maybe they aren't and one problem just caused some other problems?
Also - I haven't mentioned before. The mower has two pedals side by side, one for forward, one for reverse. And I swear (unless I'm just loosing it), that before the problems started the pedal height was the same, or close to the same. Now the reverse pedal height is much lower, and, correspondingly it doesn't seem like it has as much reverse speed.
So yes letting it self bleed (wheels off ground) made a difference. I haven't tried "cracking a line", as Cord suggested, but that would take either another person to operate it, or disabling the safety controls so it could be operated with no one in the seat. And I wouldn't get under the thing with the wheels turning anyway. More bleeding still needed? What about the other problems? I can't imagine they could be related to air in the system?
Thanks for all the help so far,
Dave