Hi,
Just a quick update to anyone who read my 'this isn't fun anymore' post. The problem with the brakes turned out to be the master cylinder - I checked the rear shoes and they were fine. Changing the master cylinder wasn't a problem - bleeding the brakes was! The bleed screw broke off the caliper! Three hours of careful (and not so careful) drilling and re-threading, and I finally have a new bleed screw in there. Looks like everything is OK now. Phew. Now I just need to get my engine sorted out. Arrghhh!!
Chris.