So you have 10" x 2-1/2" brakes on the rear now, same exact parts as before on a different rear you were using?
Just trying to be clear...
you were using a large bolt 7-1/4
swapped the brakes from the 7-1/4 to an 8-3/4
made no other changes to the brake system
pedal effort increased and stopping power decreased
Sounds like something maybe didnt fit back together right...
were the tops of the brake shoes fully seated against the top pin before being adjusted?