'83 CGT brake repair

[Scott Fisher <sefisher@cisco.com>]

Sometime in the past week or two, my wife reported that the brake pedal
on our '83 CGT started getting mushy.  I last drove it about two weeks
ago and it was rock-hard and the brakes worked quite well.  (She said
she had to lock the brakes a few days ago and that ever since then it's
been spongy.)

This morning, I checked it out.  Sure enough, the pedal now goes all the
way to the floor and the forward reservoir was pretty much empty.  I
filled the reservoir with fresh Castrol LMA and tried pumping the pedal,
but no luck. 

My suspicion is that I've lost the seal to the front circuit on the
master cylinder, as the car's idle speed dropped when I pressed the
brake pedal, just as though it was slurping brake fluid in through the
vacuum line.  Hmmm.  The vacuum line itself is intact, but if it leaks
into the diaphragm, that would cause the idle-speed drop.

My questions: 

1.  Any experience on the likely culprits for a sudden loss-of-fluid
failure like this?  What's a quick test for master-cylinder integrity
(or is it pretty much "if you lose all your fluid and the pedal goes to
the floor and the idle speed drops when you step on the brakes, your MC
is toast")?  I'll be inspecting the whole system tomorrow, and am
planning to flush/bleed it on the off chance that, for some unknown
reason, we've sucked in a bunch of air.

2.  I was planning to replace all the friction surfaces and wheel
hydraulics in the next month or so anyway (thereby spending roughly
twice the car's resale value in one operation, but hey, we do that every
time we fill it up with premium unleaded, right?)  Is there a compelling
reason to buy them from anyplace other than Linda @ Carlsen, especially
considering that we live 20 minutes away from them?  I am not (at
present) interested in re-engineering the brakes, but if there are
direct, bolt-in replacements for some the stuff I'm taking off (and
assume that I'm taking off everything except the steel lines, pretty
much) that would improve performance and/or longevity, I'd like to know
about it.

3.  Every major repair I've undertaken on this car has resulted in my
making at least one misjudgment before beginning, because I didn't know
that the Audi engineers had done things completely backwards from the
rest of the world (e.g., the thermostat being in the return line to the
water pump, or the water pump being inside the damned engine).  What's
the one thing that I probably don't know about the braking system on
this car that'll bite me in the ass if I just start working on it, using
the Bentley and my considerable and extensive knowledge (which acts a
lot like prejudice in this context) of the braking systems on other
cars?

4.  Should we take pictures and put 'em up on the Web as I get into the
procedure? :-)

Thanks!

--Scott Fisher