Here's the results to date:
Those pictures were actually of a spare, but I have no reason to believe my current piston is any better. So I bought one of the phenolic pistons but it's still sitting on my workbench with most of the rest of the front brake rebuild parts. It's still sitting because since this original post, I replaced my handlebars from the low-rise bars that came with it to a set of OEM standard bars. In the process, I found the PO replaced the top brake line with a shorty SS braided line to accommodate the lower bars and it no longer fit. Fortunately, I had a spare old, but still serviceable lines off some of the brake stuff that I had been acquiring. In the end, I dumped the fluid, replaced the lines (albeit temporarily with old), refilled with new fluid and bled them out. Shazam! Now everything's been working quite nicely and the brakes are much, much firmer with no perceptible dragging. I'm still going to rebuild the whole mess, but the focus has been on riding, not wrenching. Now with the onset of crappy Buffalo winter weather, that will change.
Moral of the story: When you buy a new ride, dump the old brake fluid, replace and bleed. It's too important a system to be running around with old, unknown quality fluids coursing through your brake lines.
And when I finally get around to my brake job, I'll try to remember to post the results.
