AFter looking at several pics of the system, the only thing I can see that might be problematic is the loop going to the prop valve.  It should come out of the MC than loop downward for best results.  Cannot state that is the exact problem but is something I would do different to keep potential bubble out of the line.  Advised to set the prop valve in center position, not maxed either way.  Be sure all lines are below level of MC fluid and watch for raised areas in the line.  Everything else seems correct.

GPatrick wrote:

When I was building a brake system for a car several years ago I managed to end up with a geometry where the pedal was "over center" for lack of better words.  It has to do with the position of the brake pedal pin and the pivot center.  If the pin is in front of the pivot in the fully retracted position, you get less force the further you push the pedal.  I finally found a picture of this on the interweb and it fit my problem exactly.  In my case I had the luxury of being able to move everything around so when I moved the pivot point forward, with nothing else changed, I had brakes.  I am not familiary enough with the 67 booster in a 66 and pedal ratio differences but it is relatively easy to create the over center condition and not realize it.  Something to check, at least.
 

He has apparently correctly installed the MustangSteve power brake conversion, so geometry should be OK.

Yes, the MustangSteve pivot has been installed correctly. But I will check that the pushrod is not in an "over center" condition and triple check the pushrod travel length. Then I'm going to put the MC back in the car and isolate the front brakes then the rear brakes. I hope to learn whether one works while the other doesn't. I guess I could isolate each wheel for that matter.  As we all know, something is definitely wrong - it's just WHAT. I'm about ready to throw out the whole system and send it to a brake shop - LOL. Thanks for hanging in there with me.