I think that folks are on the right lines. I just replaced the entire front brake system on my 888 with new billet callipers, new stainless lines and a 'new' master cylinder from an ST4S, so basically the whole system was full of air.
The master cylinder was pumping fluid through to the calipers, but not very effectively, and as you say the lever was coming back to the bar. So I had to bleed it at the master cylinder banjo end. I'm running twin lines from the master cylinder so there were two banjo bolts, a spacer and 4 copper washers in total, seperating the joints. There were plenty of joints for fluid to seep out from, so it can be a messy business and you'll need loads of highly absorbant rag underneath the master banjo. Then, just crack the banjo open and squeeze the lever slowly - don't squeeze it fast otherwise the fluid can spit out from between each joint (even if you only have a single line with two joints to worry about) and spray everywhere - don't ask me how I know. Hold the lever right back to the bar for a couple of seconds, then tighten the banjo up. Do this a few times until you're sure that there is just fluid seeping out of the cracks between the banjo(s), it may take more goes than you'd think.
It might help if you have a bottle of muc-off or similar and a hose handy as well. Once I had made sure that there was no air in the master, and put the master cylinder cap back on to make sure I didn't get water in the master reservoir I gave the whole area a good squirt of cleaner and rinsed it all down to make sure that I didn't have unseen splashes of brake fluid hanging around on my paintwork.
Once the master was bled through, I went back to bleeding the callipers as normal until I got a good lever feel, then I squeezed the lever back hard and cable tied it to the bar overnight. I went out the next day for a 200+ mile rideout and the brakes were fine all day although the lever was still a bit soft for my liking.
I think I will repeat the process again this weekend, and as often as necessary to get every last gasp of air out of the system. The other thing that might have affected mine was that I bought a fresh bottle of brake fluid before I started and filled the reservoir up once. I sat the bottle a good few feet away from the bike because I'm paranoid about brake fluid getting spilled, but sods law dictated that while I was busy bleeding the master cylinder the bottle fell over and emptied itself completely over my path. So, I had to finish bleeding the system with a bottle of fluid that's been sitting around half full for a couple of months, this may have absorbed a bit more water than ideal, so the system may need flushing through with fresh fluid before it's perfect.