Well after a lot of head scratching and replacing most of the brake system we've called time on the XR2.  The brake pedal essentially had no resistance from the master cylinder/servo and so kept going to the floor with almost no braking force getting to the wheels.  We bought the last new master cylinder in the country and did a major bleeding marathon but this had little effect.  Due to a lack a parts it's just not feasible to repair any longer and so we're now looking for something more modern.