There are a number of suggestions already posted, I will not add to those.
May I suggest:
A positive return location with a spring. This will allow the pedal to start in the same location each time.
Check the reservoir to reservoir transfer. If one is too large, you pedal travel has to compensate and you may exceed the recommended travel for the master cylinder.
Most disc brake systems use the "square cut seal" method to retract the piston face back into the caliper. It has been used for several years successfully.
If the brakes are not retracting, either the seal has lost its ability to retract the piston or there is a tolerance problem ( the corrosion changes the tolerance of the piston ). Corrosion on the piston is the number one cause of a failure to retract the piston. You may want to have the calipers completely disassembled and checked.
Hey, these are just suggestions.
