First, like Mike says be sure that your brake pedal is adjusted correctly. When you say it doesn't start engaging until a third of the way down, is that pedal travel.......or is that actually the piston travel?
Second, you didn't read my warning in the M/C thread?? ;p
This happened to Eric and me after rebuilding the master cylinder. My problem seemed to be heat, as soon as it warmed up under the hood, the brakes pressurized. Exactly as if the pedal were too tight......except it was loose.
I also wasted countless hours bleeding, rebleeding, taking the check valve out, putting it in, insulating the brake lines......
It turned out that the master cylinder piston was not returning far enough to allow the fluid to return to the reservoir. You can check this by siphoning out the reservoir and using a small nylon or plastic rod to probe down through the hole into the cylinder. If it feels rubbery the cup is in the way. Do not use anything pointy or sharp as you'll ruin the cup. What I had to do is remove the washer behind the retaining clip and grind half of the thickness away. This allowed the cup to clear the passage to the reservoir. My brakes have been perfect since.
I don't know if this is a problem with the dimension of the new piston that comes in the rebuild kit, but it's looking that way. You could just as easily turn down the end of the piston also.