Thinking more about this - The lugnutz disc brake brackets weren't holding my rear calipers perfectly square to the rotors. This was making the rear pads bind because when new, there wasn't enough room for the brake pads to fully retract. There was some sort of shim in with the brake pads that I removed - that gave me enough clearance to run without binding.
I have put a bunch of miles on this set up now, and it works really good - you can tell (when looking at the brake pads) that they are wearing at a bit of an angle, so they will wear out faster than they should, but they still are wearing pretty slow.
Having the adjustable prop valve is probably a big part of making this work though, as I can adjust how much fluid is going to the rear brakes. This might make my pedal travel less than yours.
My rear axle is the SF 14 bolt. I had to grind a bit of the casting flash off of the oem rear axles to get this to work also. At first I was bummed out, then I remembered that 90% of all aftermarket parts that I have ever purchased - they have needed tweaking to get them to work as advertised. Seems to be just the way that it goes.