Rafi,
When I bled my system, after a while all I got was tiny bubbles.
I did get "gushes" out of the bleeder.
At that point where I got "gushes" from the bleeder screw I closed the bleeder up and continued to get tiny bubbles coming up.
I tied back the brake handle half way put the master cylinder cap on loosely to keep moisture out.
Let it sit over night with handlebar to the left.
The next day I put maybe 1/2 an eye dropper of DOT3 brake fluid in, closed up the cap with diaphragm in place and worked the brake lever.
The brake worked fine.
Questions:
Is the fluid level good now in the master cylinder?
Have you locked up the bleeder screw?
If the bleeder screw is tightened up, have you waited for the final tiny bubbles?
Is your brake working at this point?

Last thing. Is the caliper piston in correctly? (Yeah, I know, stupid question, but had to ask) With the solid face pointing in toward the caliper body.
If the brake works, then it might just be that you are over thinking things.

PS: When you said "gushing" how much fluid is gushing?? (It may not really be a lot of fluid. A typical cut on your head looks like a lot of blood but in reality is probably not enough to fill a thimble).
Charlie