think i remember seeing in another post about the valve issue. He was unable to bleed the rear brakes until he bled the front and then the valve you are talking about moved and he was able to bleed the rear.
If your rear pads are soaked with brake fluid, I am sure they are if the wheel cylinders have been leaking for a while, replace them. They can get sticky.
Good Luck.
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1971 Chevy 1/2t, 350
1998 Yamaha V-Star 650
1970 Chevy 3/4t, I6(freshly rebuilt), 4 speed
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