True, if only the internal seals are bad the brake pedal will drift down without having air in the system. But because the rear circuit is holding pressure and the front circuit won't bleed, I thought the main problem here was identifying why there was air in the front circuit. For air to get in, fluid likely has to go out. In that case he should, but not necessarily, see fluid at the back of the MC.
Further, if the back circuit is okay and the front circuit is on the front reservoir (like I believe my factory disc car is) then it's even more unlikely that the MC is bad IMO. At this point I think Joe has to be methodical in approaching this problem if he's going to figure it out. Double checking everything before buying a new MC is my suggestion for how to proceed.