Now this does sound like fun!

Have you checked to see that you can generate pressure at the master cylinder? I don't know how you could get air trapped in there and still get fluid out the caliper bleeds, but it sure sounds like that is the case.

Also, I've know systems to hold huge amounts of air -- took an amazing amout of fluid to get the brakes on my brother's chevy 1-ton to work, the right front must have a mile of line or something.

You might want to pull the master and do another bench bleed -- you can check for it's ability pressurize the lines at the same time. Its always possible you got an ancient master cylinder in which the rubber was already gone.

Peter

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1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!