1, it's not a clutch.. it's an inching pedal..
2, engine has to be running to 'unlock' the trans.. thus when trying to tow it with engine off, you have to throw the traction disconnect lever to uncouple the rear end from the trans.
3, 20ys ownership? do you ot have the sos manual insert for that machine? how have you been maintaining and adjusting / servicing it?
check this list out.. has some lockup options at the end... list is courtesy of John Smith:
Malfunction - Common Causes
Transmission remains in Park
Low fluid pressure
Bands 2 and/or 3 not released
Damaged or broken selector cable
Transmission goes to Neutral
Band 2 or 3 not released
Clutch packs not engaged
Traction coupling disengaged
Damaged or broken selector cable
Transmission functions in all selector positions, but can be held in tenth speed without stalling the engine (1500 rpm) when brakes are applied
Low fluid pressure
Defective torque limiting clutch
Transmission functions in reverse only
Mainshaft broken or damaged spline on "B" carrier
Transmission functions in 3, 4, 7, 8, 10, and R2 only
Overrunning clutch not applying
Transmission functions in all selector positions but provides the direct ratios only
Band 1 not applying
Transmission goes to Neutral in Park, 5, 6, 7 and 8
Band 2 not applying
Transmission goes to Neutral in Park, 1, 2, 3, 4, R1 and R2
Band 3 not applying
Transmission goes to Neutral in 9, 10, R1 and R2
Clutch 1 not applying
Transmission goes to Neutral in 2, 4, 6, 8, 9 and 10
Clutch 2 not applying
Transmission goes to Neutral in 1, 3, 5 and 7
Clutch 3 not applying
Transmission locks up in 3, 4, 7, 8, 10 and R2
Overrunning clutch not releasing
Transmission functions in all selector positions but provides the overdrive ratios only
Band 1 not releasing
Transmission locks up in 1, 2, 3, 4, 9, 10, R1 and R2, and goes to Park in Neutral
Band 2 not releasing
Transmission locks up in 5, 6, 7, 8, 9 and 10
Band 3 not releasing
Transmission locks up in Park, 1, 2, 3, 4, 5, 6, 7 and 8 and goes to R1 in Neutral
Clutch 1 not releasing
Transmission locks up in Park, 1, 3, 5, 7, R1 and R2 and goes to 2 in Neutral
Clutch 2 not releasing
Transmission locks up in Park, 2, 4, 6, 8, 9, 10, R1 and R2 and goes to 1 in Neutral
Clutch 3 not releasing
Root Causes
Low pump fluid pressure
Low fluid level
Plugged or incorrectly installed suction screen
Pump gasket leaking
Pump pressure line or "O" ring leaking
Defective torque limiting clutch
Defective pump
Leakage between valve body halves
Leaking valve body gasket
System relief valve stuck open
Restricted pressure line