2004 Aztek brakes

Recently my wife"s Aztek brake pedal started to travel further than it used. The pedal was squishy. I probably has been doing this for about a month. Today I changed the front and rear brakes, and turned the rotors and drums, greased everything, adjusted the rear brakes up and also bled the brakes. The brake pedal goes down about a quarter of the way now before the brakes engage, but it seems as if you have to still push the pedal down further to stop completely. Once you are stopped you can push the pedal to the floor and it will come back up. It doesn't travel by itself, you have to manually push it. I was told that the master cylinder is going out:runaround. Would this cause a squishy pedal? It isn't leaking any fluid, anywhere. Is there any other way to check if the master cylinder is going out? I just don't want to buy one if it isn't bad.