Could be the brake lines collapsing, though I´ve never run across it myself. The brake lines are made in layers, the inside layer is often pretty soft.
The pistons retract very little and there really isn´t much in the way of suction to help. Very little binding will cause enough friction to lock up the pads/disc.
I´d work the piston in and out a few times, exercise it and see if this doesn´t help. Then I´d fill a small glass jar with an inch of brake fluid, run a piece of plastic windshield washer tubing into the fluid it the jar (so the tubing can´t suck any air). Do a couple of rounds of pedal, close bleeder, open bleeder, then leave the bleeder open (slightly) when your sure the plastic line is full of fluid. Add fluid as you pump it down, until clear fluid comes through. Clear plastic aquarium tubing works best, you can look and make sure there are no air bubbles in the line.
The thing that throws me, is that as I understand it, both are locking up. There are very few things both sides have in common. The master cylinder is one. I´ve seriously bleed brakes before and have gotten an amazing amount of crude out of the system. Not gonna state an oppinion as fact, but it seems possible a check valve or orifice in the master cylinder may be plugged with crud.
Have had pads that were too thick from the manufacturer, took a little sanding to get them to work. Have had moisture in the system that made steam at operating temps. and locked the brakes down. Have had pistons stick. Have heard of collapsing rubber brake lines causing binding, crud in the master cylinder, bent caliper rods and flattened hard lines causeing binding (enough pressure to force through fluid, but not enough pressure/suction on the return, to allow the pistons to retract). In theory a pinched rubber brake line could do the same thing as a pinched hard line.
Had one set of brakes that hung up, drove me nuts, until I noticed the star retainer for the disc, was on the inside and making the discs/pads seat crooked. Don´t ask me why the last mech. put the retainers on the wrong side of the disc. It´s usually something simple.