Hmmm My post never showed up, I'll try again.
I can't take much credit here as Klaus speculatd correctly in his second post. I only chimed in because I saw that you said the spring was correct in your response to him, but my own experience was that I too beleived I installed the spring correctly but actually hadn't. It's an easy mistake to make (even for an experienced machanic) and with such disheartening consequences. I was looking up master cylinders and kits after trying many of the suggestions I found in these archives when i finally set my ego aside and looked at the S80 brake tutorial that someone posted and saw the note imploring correct spring placement.

All the responses on this reciprrocal board are invaluable and much appreciated as they provide knowledge and hope for those of us who NEED to save on the outrageous cost of dealer repairs.

I have to wonder how many home mechanics (and even indies) who had this very same problem take the car to a dealership in exasperation and pay them off for the simple fix...and of those, how many ended up paying BIG BUCKS when the dealer told them they needed to re-do the entire brake job/masterc cylinder, but actually only re-set the spring?