The different size master wouldn't cause your problems. All other things being equal, you would notice a small increase in pedal travel and a decrease in effort to push the pedal on the smaller cylinder. Your problems are more than that.
The master you are replacing was on the car several years. Perhaps there was some corrosion build up on/in the master cylinder and the extra pedal travel while trying to bleed the system allowed the O-rings to contact these areas? How closely have you looked at the rubber flex line in the rear? Are there any cracks at all?
If all else fails try reseating all the connections for the metal lines. Maybe one isn't quite snug?
Good luck and let us know what you find, Ra
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