Ben, I would do as others have suggested and change the hydro fluid. As for the jerky hydro movement, deere used 4 different versions of hydro linkage over the 318 production run. The 3rd version had the unfortunate side-effect of very jerky hydro action when moving the lever between forward and reverse. Deere came out with a repair kit (PN AM116222)that would convert the 3rd version to the 4th and be much smoother. Unfortunately, the kit is no longer available, though parts of it can be bought separately. The 318 serial numbers that the kit covers are 485762-790000 and 10001-104040. If your 318 falls in this range, there is nothing wrong with the hydro, it's just a bad linkage design. My 332 can also be pushed around within a few minutes of shut-down without engaging the release lever. It's done this from when I bought it with less than 400 hours. I have put over 1000 hours on it since then, with many plow days included and never had a trans issue. I don't think this is an issue to be concerned with. Just don't park it on a hill without setting the brake.
Bill
Bill