Sounds like a control valve problem. When the lever is in the off position, there should be no oil going to the PTO clutch or brake. The fact it drags down in both off and brake makes me think that the main clutch is engaged all the time, and that the brake is being engaged in both of those positions, but not in the on position.

Of course, the PTO clutches are now most likely warped from the heat of what has happened, and going to cause problems from here on out, but I would check that control valve before anything else to see what is going on. You could cap off the line that gives the valve pressure, and then see if the PTO drags it down ( which it shouldn't without hydraulic pressure.)