I know you've drained it already but I'll throw this out anyway. I couldn't find your original post (and now see that it was an email), but from what you describe, you're working on an A/B/1XX.
A good starting point for evaluating things is to make sure first that the tranny is filled to the level of the check plug. If you have a PTO/pulley, fill it from the plug on that housing until you get oil and let it settle at the level of the check plug. I don't know if the 1XXs varied in capacity from the As/Bs (or maybe you're working on a Cub), so use your manual and its recommended capacity to evaluate things.
It's only after you've done that that you should drain and measure what comes out. Using the A/B as an example. With the oil up to the level of the check plug and the tractor on a level surface, you should get very close to 5 quarts out of it. Any amount that is significantly less will indicate the volume of sludge in there that is taking up space that could/should be occupied by free-flowing gear oil. Point is it's possible to get four quarts out, but that would not necessarily means it is low. If it was up to the fill level to begin with, it would indicate that you've got a quart's worth of sludge in there. Simlarly, if you also drain the PTO/pulley housing after filling from the plug on top of it, you should get another pint from there. Again, significantly less than that would indicate sludge.
If such turns out to be the case -- draining less than the recommended volumes after being sure that everything is filled to its proper level -- then one might consider a cleaning.
I've got into one where the sludge was so hard and crusted that I had to dig a coat hanger in from the drain hole to even get it to drain. On that one the sludge was so deep that I opened it up and found the gears were carving against it, and it was taken down and scrubbed inside and put back together with new bearings and seals.
If the difference is moderate, one could try the trick of filling with about half of your drained oil and filling to the right level with diesel or kerosene, then driving the tractor around for a few sessions enough to get the the lube warm and letting it circulate for awhile. Let rest. Do again. Repeat. Then drain while still warm, and see if the volume that drains improves.
If it does not, and you end up getting something like two or three pints less than you should (on a machine that takes 5 quarts) then opening it up and scraping and digging would be in order, followed by another warm run with a kero-thinned mix in there before refilling with good lube.
My two cents, with apologies for going on so long.
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