I have a 94 Grand Am V6 with ABS brakes and drums on the rear. When the car is running, the brake pedal travels almost all the way down to the floor. It can stop the car just a little bit better than a car with a full 2 circuit master cylinder, whose brake line/hose is ruptured. When the car is NOT running, the brake pedal feels normal (firm with little travel). The pedal is very spongy at all times when the engine is running. No amount of pumping will firm it up.
The rear brakes are freshly lined, cleaned, and adjusted. Both pistons in the wheel cylinders move freely, as do the adjusting star wheels. There are no leaks in the hydraulic system. The caliper pistons move freely. The disks and pads have yet to be changed but are functioning properly.
The entire system was bled like a conventional non-ABS system with the following exception: since there are no fittings at the actual master cylinder, I used the two bleeder screws on the ABS module. I not only bled for air, but I pumped enough fluid through the system to change most of the brake fluid.
When the car is first started, both the "brake" and "ABS" lights turn on for a couple of seconds to indicate that the bulbs are not burnt out. After that, they remain OFF.
Sounds to me like you've got air somewhere in the system. ABS-capable scan tool may also be needed to bleed certain ABS systems if air has gotten inside the ABS modular assembly.... Two links that might be of use: http://www.brakeandfrontend.com/tsbrake/9014.htm http://www.abrn.com/abrn/article/articleDetail.jsp?idX824
It's been ages since I've had to pressure bleed a system so I'll leave the personal tips to the more experienced guys here in the group. But I'll bet that you've had air drawn into your system somewhere.