If you are using the stock master cylinder for an 81 cutlass, you may be running out of fluid for your rear calipers. The front reservoir (for the rear brakes) is pretty small and the rear calipers may be draining all the fluid out of the front reservoir.
This has nothing to do with the rear calipers dragging, but it is most likely the reason your pedal goes to the floor.
The stock 24mm master cylinder is most likely too small to supply the fluid needed for the 4 wheel disc brakes. I would step up to a 1.0" bore.
I am not sure it will fit your vacuum booster, but a RIGHT HAND DRIVE (think postal truck) S-10 should be a bolt it. It is a 1.0" bore, has a large reservoir, and uses the stock brake lines fitting.
http://www.maliburacing.com/forum/viewtopic.php?f=25&t=124945
Also, double check to make sure that the bleeder screws are at the top of the caliper and not the bottom.