Let's play trials doctor.
Symptoms: Extremely squishy rear brake lever. With TPA set nearly all the way in (lever all the way out), when the pads contact the disc you can still pull the lever (with some effort, mind you) all the way to the bar with one finger. My front brake is much more firm and you cannot do this.
Measures Taken: Initial thought was that I needed a good bleed. I did this, put everything back together, and the lever was still squishy. Thought I may have screwed up the bleed so I did it again, this time being extremely focused and watching what was happening. What I found was that after 150ml of fluid went through the system (refilling the reservoir a good 50 times) there were one or two small bubbles coming out of the brake caliper each time I opened the bleed valve and pumped the lever. I kept going and going thinking that at some point I would stop getting these small bubbles but I never did, they just kept appearing. I put everything back together, rolled the reservoir diaphram in as you're supposed to, and figured that I must have at least improved the lever feel a bit, as I did get a decent amount of bubbles out. Nope. I'm fairly certain it is even more squishy now than before the bleed. I am fairly confident I did a good job bleeding as I took my time and watched what I was doing very closely. The fact that one or two bubbles came out in very consistant manner makes me think there could be a leak in the system somewhere. Did some research and read that if the pads aren't contacting evenly it can cause squishiness at the lever. I checked and they seem to be contacting fine. Even when both pads are fully clamped on the disc you can still squeeze the lever into the bar. This leads me to believe there is a crap ton of air entering the system I just don't know where and I don't know what to do.
Additional info: One of the screws in the reservoir cap is stripped. The other screw does all the work holding the cap down over the diaphram. I'm not quite sure if this could have anything to do with it, as when bleeding the cap is obviously off completely and the bubbles are appearing anyway. Also, when pulling the lever you can hear a squishing noise. I don't really think it is anything, I think it's just the rod boot with some spilled brake fluid on it making noise. Figured I would mention everything I've got though in (hope)s someone can help me.
Cheers, sorry if that's a bit much to read through, I appreciate any help you can give me.