Curtm, nice snow removal unit you have there.
The jerking lift could be the wrong oil, sticking spool valve, or the cylinder.
The correct oil to run is Cub's "Drive System Plus". It's kinda pricey but it's correct and is synthetic.
I use a contact tachometer on my machines and when the engine is at 3600 RPM the PTO should be spinning at 2000 RPM.
Here are some free manuals if you don't have one yet.
http://www.mymowerparts.com/pdf/Cub-...epair-Manuals/