We checked the cable to make sure there
was no slack yet the abbreviated handle plunger was virtually in
contact with the piston in the master cylinder and the master cylinder
piston was moving. *Nothing seems to make any difference. *

In addition to pad wear, discs get thinned over time as well. Make
sure the disc and pads are up to spec'd thicknesses. It is possible
the combo of both can run the piston out of useful travel. Also verify
the cable is transmitting full force, a frayed/worn out cable can have
enough strength to plunge the piston, but so much elasticity that it
won't do it with much force, especially if it's one of those wussy
bicycle cables and not the stout Boden (motorcycle) variety.

-Paul