Ours is always in the locked position - floating position moves around too much, gives an undulating grade. As for depth of the drum, for us it all has to do with the angle of attack. Turning the wheels up to allow the drum to dig in fully will cut into the soil more, but you run the risk of stopping the drum dead in it's tracks and blowing a hydro line.
And yeah, we need lots more than one pass to grade. Minimum of 6, sometimes twice that. But still much better and faster than a bucket and rakes.
@Pelican and NCSU, We run the rake on a 6635 sxt Gehl - not much heavier than your Cat (maybe a thousand pounds when you include our weight kits), so I'm not sure why we're breaking U bolts and you aren't - we sent one of the arms flying when both bolts let go and it got caught in the drum - pitoooey!