I would agree that it sounds like air. +1 this can be frustrating! That MC should work -- and even if it doesn't you should at least get a good hard lever before you know that it doesn't. I am not sure this question belongs in the Performance Forum, but that's not my decision!
I would start by bench flushing the MC one more time. I sometimes am amazed at how persistent those bubbles can be in there.
Once you are CERTAIN it is 100% air-free (and you have the banjo end capped and waiting for the hose hook up), then you might seriously consider reverse bleeding the system -- forcing the fluid from the bottom up and out through the top. Bubbles like moving up more than they like moving down. While you have the master cylinder removed to bench flush it, go ahead and rig up a brake fluid pump to the bleeder valve, and work the fluid up and out through the hose at the top. Remember that after the master is bench prepped, regardless of how you flush the lines, it usually helps to start with the caliper piston(s) fully compressed while bleeding the rest of the system.
For your reverse flush you could use a giant syringe like Nurse GoodBody has whipped out on this poor lad:
I also have a powered vacuum pump that I normally like to use. It can suck a full reservoir down in a few moments. It seems to help with stuff like this, but even then bubbles can get still stuck in an especially cantankerous system. It seems better for replacing fluid than the original fill up/air flush.
Patience and persistence.
Good luck!
-fang