Weird update:

I just took a turkey baster and drained the reservoir. It is BLACK (heh I should take a pic)

I filled, used the pedal, and drained and refilled again. I took it for a drive and it seemed a little better but was not really releasing like it should.

wtf could have caused that type of contamination? my black boot thing was in the reservoir, cap was on tight, etc etc.

 

Sounds like you over heated the fluid and or slave cylinder/seals and now have a very small leak past the seal.