Brakes Dragging - Pushrod too long?

The master cyl internal springs are all that pushes the piston and pedal back to home location.

Maybe....

If the pedal sits too high the weight of the pedal might be keeping the master from fully returning to home.

The fact that you can manually move the pedal a bit and the master releases all pressure shows that there is something that is keeping it from fully returning.

I would look for interference, maybe the bellows, maybe the shape of the adjustable rod?