Just one simple question (based on my own past experience!): did you put the calipers on the correct side? Mix them up and you will never be able to bleed the air out of them. The bleeder screw needs to be above the cylinder, not below.

I recently has my front struts out which meant that I had to bleed my front brakes. After we did the initial bleed, I had a pedal going to the floor. It ended up being a leak in the "distribution block", not sure if that's the exact name for it on a Volvo. It's also possible that if your Master Cylinder is older, a line of crud will develop behind the seal, so when you drop the pedal to the floor, the seal will be pushed past the line of crud, and a proper seal will be hard to attain again.

Hope this helps, good luck!

My thoughts:

Did you check the lines and the rear brake valve for leaks?

If not, I would bleed the entire system again - I know it's a PIA. I've read on this board of others having difficulty bleeding 240 brakes. Me included!!!

I understand it is possible to kill the master cylinder after bleeding. Check for leakage, lowering of fluid in the reservoir etc.

I recently replaced the rear calipers, rotors and pads on my 1990. Bleed and flushed system - twice. Okay at first, then I noticed a leak under my master cylinder. I'm thinking, oh S..T, I had just replaced the MC last summer. Turns out it was the brake line junction box. All the bleeding might have killed it or it was just its time... Might want to check it for leaks too. With the amount of miles on your car it could be either one.

Good luck,
Jim 1990 244 DL 200K