Sorry for not updating this thread. I ended up doing a rebuild on the 3PT. Here's the thread on it.
http://www.tractorbynet.com/forums/hydraulics/174760-jd-2240-rebuilding-my-3-a.html The gist of what I was experiancing was that my lift valve was leaking and putting pressure to the cyclinder.
The rebuild was pretty straight forward and simple. IIRC, the parts weren't that expensive either. Under $200 I think.
Keep us posted on what you find and how you address it. You're welcome to use this thread for it if you wish.... or post us a link to follow.:thumbsup: