Master cylinder leaking

... if the piston is to far out on the stroke, the initial push causes a flood to the reservoir....
That is what I was thinking when I mentioned the rod adjustment. I think the way the MC works is that with the piston back, it exposes a side feed hole for the cylinder. As the piston strokes forward, it soon closes the feed hole, allowing pressure to build up in the cylinder. Until the feed hole is passed, the fluid would be squirting up into the reservoir. I don't think there are check valves in an MC (other than "residual valve" on outlet of old drum MC's). However, I don't think you can adjust how far back the piston retracts in a manual MC, since it stops against the retainer. If you are using a power MC in a manual brake application, the piston might retract too far.