I've had problems with various projects with a low mounted master cylinder.... Are you bleeding the system with a pressure bleeder or with the pedal??? I had one very persistant car, a dang Fairmont with a floor mounted M/C in a drag car....Had to use a pressure bleeder after many of the same battles you desciribe to get things correct....

Also, you have a proportioning valve,,,,did the little valve in it possibly get stuck in one position or the other instead of staying centered?????