Brake pedal, MC, pushrod issue

Another question about MC's. First, when out of the car, I can push in the rod and the piston returns smoothly against the circlip, so I'm guessing something in the pedal assy is what's stopping it from returning on it's own when connected to the pedal. Also, once the piston is seated against the circlip, the rod will pull out about 1/8 of an inch more. Is this amount normal, or should the rod be tight with no extra movement? thanks guys.