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I ended up flushing the system with new DOT 4 brake fluid and several very small bubbles came out as I was doing it. Maybe now it's gonna be OK. I let it sit for 24 hrs. and all was good.
Before, there would be a small amount of softness at the beginning of the lever movement. Now, it's smooth, solid resistance from the get-go.
I did notice that the old fluid had a lot of black crap that looked like graphite in it. I've heard that that's just assembly lube, though. Whatever it is (was) it's long gone now!
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