Hi:
Yes, if the rear brakes are far out of adjustment, you could have poor braking and a spongy pedal. I would check them. Safely lift the rear of the vehicle, and spin the tires. If there is no drag from the brakes, they are out of adjustment.
As far as the light, when you were bleeding the brakes, if you allowed the fluid in the master cylender to get too low, it will set the light. Try disconnecting the battery for 5 or 10 minutes to see if that resets it.
Let me know what you find.
Joe
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Wednesday, March 18th, 2009 AT 8:54 PM