I removed the master cylinder and I see NO free play or travel adjustment on the rod or the pedal end of things.
I found the pushrod protruding approximately 2-3mm past the edge of the booster. I used a straight edge held across the hole.

To rule out the MC I swapped one from my other 300d which is an '82. While I had it off I measured the rod on the '82 . It measures about flush with the edge of the booster.
The known good MC has the same dragging front brake issue when mounted on the '80 300d.
I am at a complete loss here. Grind the rod off?