No good deed goes unpunished. Borrowed my 1971 JD500 loader/backhoe to neighbor for several days. It had very few hydraulic leaks mainly only on the loader valve a pressure relief valve would weep. Nothing serious. Neighbor returned unit and made comment a little leaky but runs great. Didn't think much at the time. A few weeks later went to use the unit and saw a 1/2 empty 5 gallon pail of hydraulic fluid in the cab (Gold brand something) and realized the neighbor used this to top of the hydraulics. I do not believe it is the universal 303 fluid that is required for this unit - which i have used religiously since owned for the past 15 years. Yikes. Started up the unit and immediately noticed a steady stream of hydraulic fluid coming out of the hydraulic pump area. Upon further investigation looks like it is leaking at the hydraulic drive shaft bearing. I then checked the overflow line which was returning a steady stream to the hydraulic reservoir (which normally was only a steady trickle).
My question now is how do i completely rid the unit of hydraulic fluid and get it back to JD 303 specs before beginning to work on the hydraulic pump leak (note: have not noticed a degradation in performance or other leaks yet)? If i simply drain the hydraulic reservoir and change filters what about the remaining fluid in in the system/pistons/brakes/steering etc.? Ugh.
First of all, I doubt that a few gallons of anything close to right is going to make much difference in your JD500 with its 20 gallon hydraulic reservoir. I guess a newer transhydraulic fluid might have some different dispersants (holds particles in solution instead of letting them settle - think soap) .... and maybe those new additives did put the finishing touch on that old seal.... well, the other side of the story is that new JD303 fluid isn't the old JD303 and maybe not even close no matter who makes it.
Not that I don't understand where you are coming from...I've ran JD303 for decades and was real religious about it. So much so that I worried about attaching any hydraulic implement because I didn't know the history of the residual oil in the auger motor, or breaker motor or grapple. And to answer your question I don't think you can ever get all the old oil out. All you can do is reduce the percentage of old in the new.
And then when I researched JD303 on the internet I found that it is pretty much hopelessly out of date compared with newer oil specs. And I've come to believe that the original JD303 never was a real oil spec in the sense that newer specs are today. It was mostly a mixture spec using some types of oils that were mixed into the old JD303 aren't even available today. And there isn't any doubt that there are better oils today. I did learn a lot about how oils used to be spec'd, and came away believing that even if you could buy something called JD303 today straight from the JD dealer it wouldn't be even close to the same oil as their vintage JD303.
Time to move on.
I don't know all that much on oils but I'm learning and I also have old machines. For what it's worth, about ten years ago I switched over to New Holland's Multi-G 134 trans-hydraulic oil and haven't seen any problems. If anything, it seems to be better... a little quieter, anyway. I've also switched to JD's new trans-hydraulic oil in several machines and it seems fine too.
I'm just one guy, and I do stick with the "premium" trans-hydraulic oils from JD or New Holland....but in spite of all of my fears, I haven't found or even heard of a problem in transmission or hydraulics at I couldn't just as easily attribute to some other cause than the oil.
So I think you are OK. Yes, the neighbor's using your TLB differently probably put the finishing touches on that seal - I've seen that very thing happen a lot. I bet you have too. In fact it just happened last year to me when I hired a guy to use my JD310. The backhoe boom and dipper stick seals started to sqawking within an hour and it happened while I was sitting there watching him working and thinking about how he was a pretty good operator.
So I doubt your problem was the oil, no matter what type of oil your neighbor used. In fact, I'd say good on him for keeping a close watch on the oil level. That could have been a real disaster. I'd tell him thanks for being watchful. He must be a pretty good guy for you to lend a machine to in the first place.
rScotty