I took a closer look this morning in better light (and state of mind).
I suspect there may be an issue with the caliper after all. Pulled it, cleaned it, reset the piston and reinstalled. I did find a bit of rust on the piston. Damn CT DOT and their magnesium chloride ice treatment.
Took it out for a test ride and found the rear brake dragging after a short ride. Opened the bleeder and got fluid out so I don't think it is a failed flex hose.
Thinking of rebuilding as opposed to a reman unit. Repair kits are available from Tasca.
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