I am by no means and expert, and unfortunately there are not many people on the Massey forum with old tractors

. As for it loading up, maybe there is something clogging the lines? When was the last time the fluid was changed? Yet alone the filter if it has one depending on year...
If there are three separate levers under the seat, I know nothing about it except that a new one cost like $600. However if it is a simple block with one lever than you can move approximately 180 degrees read below...
You have the order correct, push it towards the dash and the loader should work, pull it to the center 3 point and push it toward rear of tractor and you get the auxiliary. I would pull off the 2 bolt diverter or isolator valve (what ever you prefer to call it) under the seat, however make sure that you get o-rings, as the standpipe which the pressurized hydraulic oil comes up should come out with the cap. If it doesn't do not be alarmed you will have to take it out from what I have been told, but MAKE sure it does not fall back into the rear end as you would have to pull of the pto lever cover to get it. Also when putting it back in, make sure you get it to sit right as if it doesn't, the three point as well as other hydraulic functions will cease to function.
I would check the the o-rings, and possibly the valve itself for wear. As the internal pump was only really designed to lift the three point, the hydraulic gpm isn't very high, so the loader takes a while to lift(most people with front end loaders out fitted them with front pumps.
HOWEVER I would first try and attach the 3pt to a heavy attachment such a set of disc's and then try using it to life the loader. If it solves the problem I would think there is a problem with the valve leaking or being worn. The good thing is they only cost $100! (I don't think the seals can be replaced)