did both wheels rotate the same direction? I imagine the internal brake on your 1650 is the same as the one on the older narrow frames, which instead of locking the wheels locks the transmission output. if both wheels are off the ground, one will rotate forwards while the other rotates backwards, because the spider gears in the differential are free to move but the ring gear is not. if you put one wheel on the ground, you should be able to test your brakes effectively. chances are pretty good they're fine, because I think a lot of people (myself included) do all the speed control with the hydro lever, as you mentioned you do.
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Ian
Mine: 72 w/ k301, 3 125's, 1 w/ hydro lift, 38,42, & 2 48 decks, 2 42 front blades, QA-36a & QA-42a thrower, tiller, lo-boy 154. Also, LOTS of parts.
family's:2 105's, 2 106's, 149, 2 lo-boy 154s, Farmall Cub.
Non-IH: 1940 JD Model A, 1954 JD 40 U, 1955 JD 40 Crawler, 2 1956 JD 420 U's, both w/ Henry Loader and Backhoe. JD 110. Wheel Horse (model unknown.) Power King 1614. We love our tractors! 
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