Does it still have the inline check valve on it. That would be the somewhat square block, just ahead of where the seat support/toolbox mounts to the top of the transmission. Two hoses from the Aux. valve go in to it, then two more hoses out of it, that go to the lift cylinder. If that check valve block is still there, that could be your problem too. It seems to be more of a problem lowering the draw bar, than raising, but, I've still had it be hesitant with raising it. They can get dirty, or corroded, and not function like they should. We took that block off of both of ours. Dad removed the one on his, back in the late 70's, and I took mine off about 15 years ago. No problem with either. I've seen more than several threads where guys have taken them off with no problems.
If I remember correctly, I don't think it's possible to put the Aux. gasket on upside down, the way it's formed, to block the ports. It's been 20 years since I've had mine off.
If the Touch Control arms are moving, then I'd think that part, and the pump are working properly. You should also have a pressurized flow to the Aux. valve at all times. Me, being me, would probably loosen the Aux. valve, pull the coil wire so it wouldn't start, then bump the starter a few times, to see if there is oil flow to that valve. That should tell you pretty quick, if it's the Touch Control unit, or beyond.
Also, I doubt it's the problem, but do check the relief plunger on the cylinder, if the draw bar is all the way down. There should be an ear mounted on the ram of the cylinder, that contacts that relief plunger, to keep it from dead heading against the pump, when lowered all the way. IF that plunger is stuck in, it will just circulate oil back to the valve, and you'll get no lift.