Posting an update. Was working on many other things so let this issue go for a while. The leaking on the booster was in fact the grommets between the reservoir and the MC. Replaced the grommets and it is very dry now.
So the brakes are still spongy. I think since the fluid leaked all the way out several times, I am going to re-bleed the brakes and see how that goes. Otherwise, it's time for a new MC anyway as I think this one could very likely be an original.
I am still fighting the battle with the clutch pedal dropping as I drive. If I am sitting there at idle, it will work properly and I can easily get it into 1st or reverse. I can can sit there for as long as I like and it will work. The minute I head down the road and maintain a constant speed it, the clutch will gradually drop to the floor. If I hammer down, second gear is hard to get into and by third the pedal drops to the floor. When I come to a stop and pump the pedal, it eventually returns to normal. So what I did was to adjust the clutch pedal pivot arm to where it can't be turned out any more. This has made a huge difference and the problem has almost disappeared. Then I bled the cylinder from inside the car which seems to have helped even more. Still happens once and a while while I am maintaining a constant speed, but now if I gently cycle the pedal 3-4 times (not the entire travel, just at the top) the softness disappears and the clutch works OK. So maybe the writing is on the wall for this clutch MC. I'm thinkning its not normal to have the clutch pivot arm all the way depressed since it worked fine previously without that adjustment. I replaced the clutch MC and blue hose about 4 years ago. Not sure if this would be a normal time to change out, but might be worth it at this point.
Also, I found this statement while doing a search posted by hacker-pschorr
"After replacing everything except the pressure plate / release bearing, that was next. What I found surprised eveyone, the locating tooth for the retainer ring on my release bearing was broken off. This was allowing the release bearing to float around, causing the clutch to hang up."
http://forums.pelicanparts.com/porsche-928-technical-forum/478117-clutch-adjustment-what-works.html"]
http://forums.pelicanparts.com/porsche-928-technical-forum/478117-clutch-adjustment-what-works.html[/URL]
I'm not sure what this means. Unfortunately the link to the pictures no longer exists on rennlist (at least that I can access). Can anyone explain that? I've had my release bearing off several times before and don't remember a locating tooth??
Thanks, Jon