Eureka - I have found it!
The problem is in the fall speed adjuster under the seat - I had turned it many times to make sure it was open, but the valve is failing internally and was not opening. I turned it a whole lot more, and if finally opened and let the backhoe drop!
Now I need to repair the fall speed adjuster valve, but at least that is easier to do.
I'm back in business, at least on that one. I'm still taking the front end loader off and taking the tractor to someone to check/replace the throw out bearing though, as I feel it is shot. (Plus I don't have the time and facilities to do it my self.)
Thanks for the help.