Community Forums:

If you aren't the original owner of the car, perhaps there was already a rebuilt/remanufactured, or aftermarket "new" master cylinder installed in the car.

What if that master cylinder was significantly different enough to cause the person/shop who installed it originally to make adjustments? And now once the correct parts are installed, it's way out of line.

It might be an obvious solution. In light of all of the work you've done, and all of the time you've spent, that might be all that there is left. I'd be interested to know if you were able to compensate for the brake booster. if the brakes are getting hard at the bottom of the pedal travel, an adjustment should bring the pedal up. If the brakes go spongy AFTER that, then suspect air or a MC problem. But I somehow doubt they will. I've fixed many systems like that, just not after such significant amounts of work were poured into them. That tends to make one suspicious of the parts that just were installed, when in fact those might be the right parts after all.
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chris herbst, five volvos.