Hi,
Here are some MC and brake line possiblities that come to mind:
1) Did you bench bleed the MC before installing?
2) The lines didn't bleed correctly.
3) Other failing brake system components.
4) You didn't hold-in the combination valve pin when bleeding.
Of course, there could be something going on with the booster... I can't speak to that component.
#1) MC BENCH BLEEDING:
A new MC is all air. If you simply install and fill without bench bleeding, then you have A LOT of air in your brake system that compresses rather than the brake pads/shoes compressing.
Bench bleeding involves sticking the MC in the "installed postion" in a bench vise, filling the MC with fresh brake fluid and then taking a wooden dowel to depress (pump) the MC piston until brake fluid flows freely without bubbles from the to two brake line fittings.
Make sure that while you are doing this that neither MC chamber empties of fluid, which means you need to start over and re-bench bleed.
#2) BRAKE BLEEDING:
Includes all possible problems normally associated with brake bleeding. Bleeding brakes requires two people (one to pump and hold the pedal while the other person loosens the bleed fitting and retightens before the pedal is released).
There are some gadgets (and speed bleeding values) sold at Auto parts stores that allow one man operation. Some work well, others not.
#3) OTHER BRAKE SYSTEM FAILURES
Inspect the entire system for leaks. You'll also see falling fluid levels in the MC.
#4) COMBINATION VALVE:
When you bleed the brakes, did you you hold open the combination valve when doing the rears first and then the fronts? If not, that could be part of the problem (either alone or inconjuction with another problem).
You have two choices, figure out what combination valve you have (one you push in the pin to hold open or one you pull out to hold open). This is a touchy subject since the FSM and Chilton's have conflicting advice. I'm guessing you have one where must hold it in (mostly 80s era CJs). I made a simple tool based on FSM drawings of the official tool out of a piece of 3/4" conduit. I took 6" piece, flattend one end and then cut a notch on side of the flattened end so that it slides over the valve and depress the valve pin.
The other option (without a proportioning tool) is to bleed the fronts first, then bleed the rears, then bleed the fronts again. Why? bleeding the fronts firsts sets the combination valve allowing you to bleed as normal (rears next and then finally the fronts again).
CJs have a combination valve which incorporates porportioning AND metering functionality. The "pin" on a combination valve is for the "metering" functionality.
Combination/Metering/Porportioning valves occur on just about all hydro-brake systems (the exception may be ABS systems... that's outside of my expertise).
Here's a good graphic:
http://www.mpbrakes.com/combocutaway3.jpg
The "metering pin" issue when bleeding applies to dual brake systems using both disc and drum at the same time. The dash brake light will come on when there is unequal pressure between the front and rears (which can be caused by a number of different things including leaks in the front or rear brake subsystems, not "setting" the metering pin on combination valves, etc.).
In these JU posts you'll see the discussion on whether to push or pull the pin... FSM says that the later models you push; whereas Chilton says you pull... the CORRECT answer is PUSH). Bottom line, you need to depress the pin otherwise bleed in this sequence: Fronts, rears then fronts again.
Debates on push or pull... CJ-8 answer is PUSH.
http://jeepsunlimited.com/forums/showthread.php?s=&threadid=385140
http://jeepsunlimited.com/forums/showthread.php?s=&threadid=363308
http://jeepsunlimited.com/forums/showthread.php?s=&threadid=279166
Hope this helps,
Jim