Ok, so this is the story.
I've replaced master cylinder with a new one, cleaned out my caliper, flushed the fluid and bled the living bejeezus out of it. Replaced the line with a stainless one.
There's still a very soft feel to the brakes, it does grab and will stop from 40 in about 40 feet but won't get anywhere close to locking the front wheel and the brake lever can be pulled all the way in to the bar.
I've noticed that as soon as the lever is pulled the caliper starts to flex outward. Looks like there's too much play between the bolts and the caliper center floating piece.
Anyone had similar problems and if so is there a way to get the stupid thing a little more solid. My guess is that as force is applied to the disk the whole caliper section just moves outward reducing the pressure applied to the pads. This movement was probably fine with the stock master cylinder but now I've got an aftermarket which i think is pushing less fluid.
I'm sure these bushings have got to wear and would probably need to be replaced at some point but don't see anything in the manuals about it.
Here's a video of the movement
http://www.flickr.com/photos/illumiquest/3595383306/
