1979 300D - Brake Pedal Just "Sunk to the floor", but still works a little bit?

[DieselPop]

OK, So just yesterday I noticed that my brake pedal charateristic movement just changed in a very noticable way. It used to seem like I could press on it and within only one centimeter of travel the brakes would start engaging.

Now the pedal travels almost to the floor before it starts engaging the brakes. I can still stop, but much less quickly and firmly. It's an uncomfortable feeling to say the least.

I just happened to replace my front disc pads and give it new rotors in the process, but I don't know if this new problem could be related to something I did wrong. I hope not.

I'm thinking that this brake system is probably dual-circuit.. so one element in one of the circuits blew a leak. This would be why I still have just a little braking power left. I popped the hood and looked at the power-brake cylinder/booster thing and could see any leaks on or around that, so my suspicion is that it's one of the calipers or perhaps a brake line to the calipers?

Anyway, can anybody suggest where and how to diagnose this new situation?

Oh... and the pedal, as I press it, make a kind of jittery, "rubber slipping" sound, before reaching the point where brakes start to engage.

Thanks for the help.