RocketDog: Congratulations on the pickup of a 169. I think your mechanism has received the installation of a "welded float lockout pin." There is no float to the mechanism when it is welded like that. The user is supposed to install a "float lockout pin" (not supplied with the tractor) in one of the open holes seen in your pictures.
I've attached a photograph of the setup on my 149 which shows how the top half of the link is supposed to "bend" in order to allow attachments (like a mower deck) to float. Normally, one doesn't lock out the float unless one is performing ground engagement activities, like running a belly blade.
I would recommend grinding off the weld and getting a float lockout pin if you ever want to lock it back down again.
Just for the record, I can sympathize somewhat with the previous owner's frustrations. My lift frequently "hangs up" unless there is significant weight on it, I'm not sure what the problem is, but my attempts to fashion my own lockout pin were frustrated, there isn't enough room in there to take a nut and bolt either.
Jeremiah