OK short answer: My 86 booster has rod in a tad, maybe 1/8" or so. Now I blather on!... I'm pretty sure your rod tip should be inside a tad. That combined with the fact yours sticks out a tad, could be enough the translate to brake pressure. The translation from travel of pedal to master don't take much to get brake pressure. Also, if your power steering works then your PS unit is OK! Retrace your steps on everything you did when you replaced your master; and verify correct assembly.
