Does it build and hold pressure if you pump the pedal? What I've found in previous cars was that the most obvious symptom of a failed MC was if it wouldn't hold the pressure when continuously applied.

I got brakes that worked, just not where I was used to having them engage. Everything's back to normal now after another session of bleeding, that's all it took.

Icemaster,
I agree that you just need to exercise the piston in your calipers. Its sounds like what happened to me last summer when I re-built mine. I recommend detaching the softline and using compressed air to force the piston to push your pads against the rotor. Once it contacts, remove the air pressure and the piston will retract. If you do this several times the piston will then be able to move through the new caliper boot properly, having the correct amount of travel (and you don't have to worry about breaking the caliper in while driving, this will hav no effect on your pads or rotors). After you "exercise" reach of your calipers, you will need to build the entire system. After that all should be great.

Here is a related link to a thread on this same topic: http://forums.pelicanparts.com/porsche-911-technical-forum/341037-brake-caliper-rebuild-problem.html?highlight=brake+caliper

Have fun with it,
Matt