GT 275 Trans oil level issue

Bought a 1997 GT 275...Love it. I mowed a little bit with it..hydrostatic works great. there are no leaks from the trans. I checked the oil level via the dip stick...level was not even on stick..i ended up adding 1 qt to the level and it still did not register on the dipstick. I mowed for a little while, hydro working great, and noticed oil leaking from the top of the trans....assuming from the breather tube. So when i was draining the oil out to change it i got approx one quart too much hy-gard coming out. The majority came rushing out after i pulled the little tube filter out of the trans.So i did have the rec amount already in there. I put the new filter in and filled with the recommended 3.4 quarts of hy-gard but the oil still did not hit the dip stick even after running the tractor in fwd and reverse. I do notice that after i run it and the first time i pull the dipstick out there is some on the stick, but when i
recheck it it does not register on the stick. Is the internal screen plugged? Why is the hydrostat still working fine?..it works great. What am i missing. Am i damaging it by driving it? is it ok to drive?