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Hi Kirk,

Sounds like one of two things and you've about eliminated one of them. You say the fluid isn't leaking from the hose at the caliper, what about the bleed nipple? The other, and most likely, is a caliper piston seal.

If you don't have a copy of the Haynes manual, you can find one at Autozone or other parts stores. Generally, it's a pretty straight forward job. You'll essentially be rebuilding the caliper. Remove and disassemble the caliper, inspect the piston and bore for any signs of corrosion or pitting, if ok, and if the seals are replaceable without replacing the piston, you'll put a new seal in and reassemble. Do both front calipers.

You'll be using a fair amount of brake cleaner and the ONLY thing you'll use to lubricate internal parts is brake fluid. Never oils or petroleum products.

You'll need to bleed the brakes afterwards so something like the IPD brake bleeder kit could come in very handy. They, or other advertisers here, will likely have everything you'll need. Rebuilt calipers are probably readily available also. Good luck and keep everything CLEAN!
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Erwin in Memphis, '95 855t