Jinma backhoe hydraulic problem?

I have a couple issues with a Jinma JW-03 backhoe attachment. I am having a problem with the dipper cylinder bleeding properly, or I think it may be a bleeding issue. Here is the scenario: I extend the boom horizontally level over a pit, and extend the dipper straight out. Then I bring the dipper down, and it drops quite fast (with the help of gravity), but, once the dipper is all the way down vertical, it stops, and takes awhile before continuing the rest of the travel. Once it finishes the travel, it pressures nicely and bogs the engine a bit. On swinging the dipper back to the away position, there is no lag, just smooth all the way. In other words, the problem only exists when the the cylinder itself is being extended. So I retract the cylinder all the way, resting the bucket on the floor so nothing will move. Unhook the line, pull the lever to run fluid through and into a bucket, insuring no air is present, use an oil can to squirt into the cylinder to make sure it's full (it's retracted, so there is only a little room in there anyway), stick in a new O ring and put it back together. Then, for good measure I extend the cylinder and repeat the process on the other line. But nothing changes. It's like when I am curling the dipper in, gravity is overtaking the flow of fluid, and maybe cavitating? No matter how many times I extend and retract the dipper all the way, even very slowly, the problem persists. Is it because I used a 7 gpm pump instead of the 4 gpm pump that came with it? Is it because it is sucking the fluid through the pump so quickly that it sucks air somehow?

I know it's not the valve block, because we switched the dipper with the bucket on the valve block and same thing. No problems with the bucket, though. We leave the filler cap off so we can watch the fluid rise and drop in the filler neck. I saw a modification which used a larger return line from the block to the reservoir to prevent the return fluid from shooting into the rest of the fluid, aerating it. Should I consider that?

Also, the 7 gpm pump I bought had 1/4 inch pipe fittings on it which didn't match the hoses on the backhoe, so instead of using a bunch of reducers, I simply took the fittings off the 4 gpm pump and used them. Should I put a restrictor in the fittings to the pump to take it back down to 1/4 inch?

So on the dipper, is it possible that there is fluid blowing by the piston in the cylinder and therefore has to re-pressurize? Should I go ahead and disassemble the cylinder, and find a rebuild kit, in case it is a seal in there that flipped or tore?

Sorry this is so long, but I didn't want to leave you with more questions than answerers. Too many times in the forums I see questions without enough facts to form a solution. Any help would be greatly appreciated.