Ok, I swapped front pads and it does the same thing with the low pedal. If I keep my foot on the brake pedal but lift slightly, then push again the pedal raises. If I do this 3-4 times, the brakes engage where they would normally. When I release the pedal completely, the and I push again, the brakes engage very low again.
Is is possible I still have air in the system? Possibly in the lower part of the rear calipers where the secondary bleeder is? I have never had to touch that bleeder since I've owned the car.