While changing the clutch on my 240D, I went to remount the Slave Cylinder and notice the rubber boot all swelled up and the forcing arm extended so that I could not put it back in position. I tried bleeding it to no avail.
How do (1) I "Unswell" it and bring it back to neutral and (2) Where is the reservoir to add fluid back to make up for that bleeded? Is it the Brake Resrvoir?-thats the only one I see..

Sounds like you need to reseal the slave cylinder or replace it. If the outer seal is swollen so is the inner seal. The brakes share the fluid reservoir.