I have a brake pedal that goes to the floor. I replaced the master cylinder which did not fix the problem. I noticed very small amount of break fluid coming out the side (facing firewall) of the combination valve when apply the brakes. Could that be faulty?

 

We have separate forums for various topics. This is the LT1 Based Engine Tech forum. I'll move your post to "Suspension, Chassis and Brakes".....

 

Basically, if brake fluid is leaking from ANYWHERE, its a problem. Hydraulic brakes require a completely sealed system. Replace the valve and make sure to bleed everything since that leak may have let some air in the system causing the air to be compressed when you step on the pedal instead of the calipers.