Hydraulic leak

[trillium33]

I am restoring my grandfather's old 1954 model 40 JD. I got it running this summer after a 30+ year sit. I had to replace most of the electrical and rebuild the carb. After getting it running, I have a significant hyd leak at the 3 pt hitch housing. My question, is there a gasket in between the housings that could be bad? The hitch also surging up and down, would that be an internal leak or because I have the leak at the housing? Any help will bemuch appreciated.
Thanks,
Dave