The system will only develop enough pressure to overcome the load. That is why you only see 200-400 PSI when moving things around with nothing attached. When the loader got all the way up, then the pump would develop full pressure because it's pushing against something, not just moving the empty bucket.
If you get the touch control blue ribbon service manual, it will describe attaching 300lbs of weight to the arm to test pressures.
Sounds like your pressures are just fine.
The stopping 2' off the ground sounds like a lack of oil to me. If the system is developing enough pressure to get 2' off the ground, it should keep going.
My guess at the problem: The touch control pulls oil in from the loader tank by siphon action. If there is an air bubble in the touch control block or the hose connecting it to the reservoir, it can't pull oil in from the loader tank, at least not enough to lift with something in the bucket. With nothing in the bucket, air is enough to lift the loader.
I had a problem with air in the system on on a loader that I installed on a Cub once. Never did get it figured out. The pump would make a loud "ZZZZING!" noise every little while.
Maybe there's a procedure in the 1000 loader manual for bleeding the air out of the touch control?
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