Having re-read your original post, the fact that you have to keep shifting the transmission is an entirely different problem. What you refer to as freewheeling is actually an age old problem with the Muncie SM318/319 transmissions. They literally "pop out of gear" into neutral. This is caused by worn components in the transmission. That transmission uses a syncro "drum" that contains brass rings that engage 2nd and 3rd gear. The rings wear and can also disengage from the syncro assembly. Other related wear components are the shift fork, the engagement ring on the syncro assembly, and the small spring type engagement rings on the gears themselves. Some items that can cause additional problems are loose motor mounts, incorrect placement of motor mounts in modified vehicles, bad u-joints, incorrect driveshaft angle, and worn/sloppy shift levers and arms.
The 55 shop manual I have recommends 90W mineral oil. It is usually not stocked at most parts stores but can be ordered. There are better and more reasonably priced modern products available in my opinion. Don't use any synthetic products.
Fred
