Braking problem 1999 Cougar

I have recently replaced rotors and pads all around on my 1999 Cougar. I immediately had a problem with a 'soft' brake pedal ( drops about 1/2 way before engaging brakes). I power bled each wheel and replaced the brake fluid entirely in the process. No air was evident. All slides are funtional and there is no indication of any line or caliper leaks. All calipers are funtional. My Chilton manual has a troubleshooting chart suggesting that the rear wheel automatic adjustment (???) may be the problem. The rear pads do not seem to be as tight against the rotor as I would expect (no drag at all). This one has me stumped and I would appreciate any help offered.

Did you not bleed the brake fluid at the bleeder on top of the transmission?