All,
Here are a couple things that might help those spongy brakes.
While pressure bleeding, take a soft mallet and tap the caliper/wheel cylinder several times to release trapped bubbles and allow them to rise to the top and be purged from the system.
While braking, get a feel for vibrations and/or pulsing in the pedal or steering wheel. These are signs of warped and hard spots on your rotor/drums. Get a dial indicator and check for rotor/drum warpage.
Warped rotors or rotors with hard spots, push the calipers piston and pads away from the rotor with every revolution. When you apply the brakes, you have to re-seat the pads against the rotor. This means more pedal travel!
NOTE: You must clamp the rotor in place by means of a lug nuts and spacers or your readings will be all over the place.
If you don't have a dial indicator to measure run-out, take it to the shop. On a rear rotor, you can easily spin them by hand and feel them drag on the pads. The drag should be uniform all the way around.
Something else to consider, if you have ABS and LOAD SENSING PROPORTIONING VALVE (LSPV) and YOU LOWERED your car. You may have overlooked adjusting this valve for the new ride height? Overlooking this would mean the rear brakes are trying to do more of the stopping than before you lowered it. The front brakes are meant to do more stopping. Be careful here....
Some reference info can be found here:
http://www.**********s.com/camry/br.pdf
Pages: 33 and 50 (front/rear) and Pages: 194 and 201 (front/rear)
Regards,
ra