02 CR125 Rear brake Issue

I'm trying to help one of my sons friends but getting no where in a hurry.

02 CR125 that the rear brake grabs like normal (full power, no mush) and then almost immediately releases to no brakes with lever moving down another couple of inches.

I've bled the brakes repeatedly and as inept a mechanic as I am, I'm fairly certain they've been bled properly and this is not the issue. The only thing left as far as I can see it is to now rebuild the master cylinder. When the brake lets go and the lever bottoms out I can hear a very faint noise near the rear caliper piston.

Anyone have any other thoughts before I order parts this kid may not need or am I on the right track?

I'll start at the caliper then since that is where I'm hearing some noise. Trying to track down a service manual to have a peek since he doesn't have one. Similar to my zook, push the caliper out and both seals are right there?