A mystery, need some help
 

A week ago I got the car, a '76 Carrera, up on jacks and was about to flush the front brakes. I took the front wheels off and noticed that they were not pointed straight ahead. So, I figured I would turn the steering wheel to make access to the bleeder a little bit easier. As I turned the wheel to the left there, I heard and saw a splash of fluid squirt onto the garage floor just under the front valence, on the left(driver's) side. The wheel did not respond to the steering wheel. I cleaned up the floor and didn't think there was any fluid on the underside of the valence. The next day the paint on lip of the valence had bubbled up. So I am thinking it must be brake fluid, but how did it happen I haven't got a clue, I didn't even start to get equipment ready to do the flush, and why the wheel didn't turn?

The breather/overflow tube for the brake reservoir exits below the front bumper, about where you describe, that may be where the fluid came from. I can't explain why your wheel wouldn't turn unless the overflow tube was somehow jamming the wheel/steering components when in the full lock position. Definitely more investigation needed.

I would think there is a chance the flexible brake hose gave out. Brake fluid will dissolve paint.
As to why the wheel did not respond, was it just the one wheel or both sides? Tie rod, steering rack, joints on the steering shaft in the smugglers box.

How much fluid would you expect to see on the ground - about 2T?
Both wheels didn't respond. In 50 years of tinkering around with cars, never have i turned a steering wheel and the wheels didn't turn unless the steering pump was out.
Will do a careful test drive once I do a touch up on the bubbled paint.

I stopped turning the wheel once I noticed nothing was happening and didn't think a whole lot about it and just stayed focused on getting to the task at hand. I didn't actually get to do the brakes until the next day because the front bleeders where different than the rear and I didn't have that size wrench.
At least now I know that the overflow tube is near the front bumper, exactly where the puddle was found.

I wouldn't test drive it till you find the steering problem. Open the smugglers box and check the u-joints.

When you say you were about to flush the front brakes, that means you had already filled the brake fluid reservoir with new fluid? If so, the excess ran out the overflow pipe onto the front valence to dissolve the paint on the inside.of the valence. Same thing happened to me. Moving the wheels just helped move the fluid through the overflow tube. It took my paint off too. Bummer.

No, I was just getting equipment set up to do a brake flush. I didn't have anything set out yet, my biggest concern was how to jack up the car and where to put the stands. I had done alot of reading, and then I did some more reading on lifting the car up and did nothing else. You may have a point about too much fluid in the reservoir, it may the most sense, but I hadn't added any because I knew I was going to withdraw about 25cc of fluid first.
The only thing that makes sense, though.
Thanks

Were you on jack stands yet? Could your floor jack have interfered with the wheels turning? Two separate things here, turning and fluid; and not related I think.

I placed the floor jacks just back of the front tires. Weird stuff. Will take her out once the touch up cures.