Brake pedal woes...Is this a VAG problem?

After reading other threads concerning pedal travel and compensators, what are your thoughts on the effect that the compensator has when bleeding the brakes? I'm about to renovate the MC on my Mk1 diesel but after my experiences with my Audi 100 (still not resolved!) I'm thinking of holding off until a get a definitive answer. If you're interested in my saga you can read about it at
http://www.vwwatercooled.org.au/vwforum/viewtopic.php?t=12&sid=f4e5cfec5e61501ef5eb217e8f4916ce
and
http://www.vwwatercooled.org.au/vwforum/viewtopic.php?t=41
Strange thing is that the pedal is fine until you start the engine….
(Sorry, moderators if you think this is a digression from MK1s. You can delete the post if you feel you have to.)

Could be a servo problem if you only get probs when the engine is running (?)
As for bleeding the brakes on a Mk1, you just have to make sure the beam isn't hanging down when doing it (eg, jack it on both sides under the shock absorber mounts or jack it up and lower the car onto axle stands under the mounts).

Just heard and read about bench bleeding the MC. Never had to do it before but I'll buy a kit and try it. You could be right about the booster as it is leaking vacuum at the "O" ring (only slightly).