But... But... Max - It's not even 50 years old! How can the servo / shaft seals be leaking?
Agreed. Either a pump pulling air or unable to maintain line pressure. You can test this with an external pressure gauge on a TH350 (400 PSI gauge) to confirm, but unless you get really lucky, it probably is not going to be a through-the-pan repair. The tough part is that not as many of that trans series will be set up for 4WD, so a swap is less of an option.