On Sunday, May 5, 2019 at 6:26:52 PM UTC-7, Nelson Howe wrote:
Not knowing any better, I used Aeroshell 4 when I bled and topped up the hydraulic brake system in my Discus 2b. Initially it got the sponginess out of the brake. After working on it some more about a week later, I found it impossible to bleed the system further ( I thought I might still have a little air in the line) as the piston was very very slow to return after squeezing the handle. I also noticed that the rubber gasket membrane thing in the lid was deformed. After reading up on things a bit, I realize this (Tost) system calls for Dot 3-5 fluid and not the red stuff.

So how much damage have I done? What do I need to replace?

I believe the rubber components have to be a different type of rubber for each hydraulic fluid. So you probably need to replace all the rubber components.