That may be a 120V cold weather block heater. I'm no expert but I know some people use to make their own block heater for extremely low temperatures. Did you trace the plug wire to see where it actually went?
As to the lost hydraulics... I've had trouble with my MF 253 turbo hydraulics a couple of times and both times it was a clogged filter inside the transmission case. "A real messy job" but not difficult.
I hope you post the findings as to what that plug is wired to.
Ken