The front seal is far more likely leaking than the pump shaft gasket but since the transmission and converter need to be removed to change the seal it would be a good idea to check for anything that looks loose or for any streaking coming from the area where the pump shaft bolts to the converter like in KevinAz's photo.
The other issue sounds very much like the manual valve lever is loose on the shaft. Detents depend on the lever being tight and able to move the manual valve which is where the detents are located without having any slop. Stripped threads or a loose setscrew letting the lever move on the shaft is a well known issue on the Twin Ultramatics. Check out
this post and the following reply for where to look and what to do. Note that the photo is of a 55 TU. 56 has the exact same manual lever and setscrew setup but the case and rear edge was changed so the lever travel stop is posiioned differently.
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