i have spongy brakes. all new pads front and rear (front calipers are rebuilt), bled them 3 times no bubbles, drove around, bled again , still no bubbles, still spongy, here is my thinking, (defective as it may be). the passenger side rear inside piston will not go in far enough to set the .008 clearance. it it set now at about.003, the others are fine is this the problem?

I don't think that would cause spongy brakes, but a Motiv Power Bleeder is your friend in situations like this. Best $50 you will spend on that car.

Sounds to me like you had better check the pistons in the rear. Maybe that's causing the adjustment issue.

And does this look like the same bleeder?
http://www.harborfreight.com/brake-fluid-bleeder-92924.html

i thought the cap on the 914 was 45mm, thats what the european motive bleeder on pp says.

Do you have sub-par braking? Or just 'squishy' pedal?

If memory serves me right, the general concensus and from experienced techs, the clearance should be 0.004. Porsche issued a TSB (not 100% sure) but the info in the Haynes is wrong.

Crack the hard line at the proportioning valve as you bleed.
Yep, it will make a mess, have the cat dirt ready.

http://www.pmbperformance.com/Bedding.html

Check the rear calipers and the master cylinder.. A bad/leaky master cylinder will do that, and a bad rear caliper will also do that (had both happen to me)