Funny you should ask that question today, since it was just this morning that I phoned in my order to Dark Horse for a hydraulic throwout bearing and JMC brand MC kit -- $549!!! That includes a replacement bearing, but still.
Anyway, the reason was that, beginning in October 2004, about 10,000 miles into my ownership of this '65 289 fb with 3-spd toploader w/diaphragm clutch, the Z-bar setup decided to start popping throwout bearings. What happens, as best I can tell, is the TO bearing gets cocked on the bearing retainer and binds. The clutch fork rides up on the backing plate and pops off the two spring clips, which screws up the whole works.
I replaced everything, some things more than once, including two bearing retainers. Each time, a few hundred miles later, boink, another busted throwout bearing. In desperation, and since they don't make brand new bearing retainers for 3-spds, I decided to go with a '95 T-5z. Just yesterday (Monday 1/2/06) I got the Z-bar stuff back together and hop in the driver's seat in giddy anticipation of the smooth new clutch effort. Boink! Busted again.
So thaaaat's why I'm going hydraulic, and also why I don't even care that it's costing me $549+ to do it. If this doesn't work, I'm switching to an automatic!