Thanks for the input dminor and danni... I'll check out the washer tonight and if I hear anything different from Hayes I will post. It's sounding like new levers are going to be on the wanted list...

**UPDATE** HERE IS THE ANSWER I GOT FROM HAYES:

"Unfortunately, what is happening is your master cylinder is starting to fail. Those are some old brakes and getting near their end. Basically the master cylinder needs to be rebuilt but there are no parts for those brakes any longer. You will need a complete master cylinder. The good thing is that any of our brakes master cylinders will work with you calipers"