If you have a choice I would go with 1000 rpm. It will run a little smoother as you raise and lower the mower, and consequently change the shaft angle. 1000rpm may cost more because you need a more precisely balanced PTO shaft, but it doesn't need to be as heavy - so could be a toss-up. It should also save a little power because the transmission only has to step the speed down about 2:1 instead of 3.7:1.
My dad changed his silage blower from 540 to 1000rpm with a kit that added a step-down gearbox to keep the machine running the same speed. One interesting change was that when it plugged it would kill the engine instead of breaking the shear bolts as it did before.(exact same tractor)
The equipment you are running is designed for 540 or 1000 rpm. Running a mower or blower designed for 540 at 1000 is not a good idea. Your Dad was running the tractor engine slower to save fuel. So the output speed was the same. The slower running engine had less power so it stalled under load.
No he was not running the tractor any slower. The engine RPM while running the PTO at 1000 and 540 rpm was the same. Allis Chalmers had a slick system where the actual PTO shaft was a stub shaft with a flange in the middle. One end had 540 splines and the other 1000. The trick part is that when the 540 end is being used an extra gear reduction is automatically engaged to drop the speed down.
The farm was sold many years ago so I can not confirm this, but I think the reason the engine bogged instead of shearing the bolts is because Gehl used the same size shear bolts on the 540 and 1000 rpm drive shafts. Obviously at almost twice the speed you are only running at half the torque.
And as far as running the engine at a slower speed, some tractors in Europe have provisions for this. They actually have up to 4 different engine-to-PTO ratios.
