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Assuming the piston itself can move without binding in the caliper body, then it's most affected by the seal. It's the function of the seal along with the groove in which it sits that withdraws the piston when lever is released. (Attachment Link) Image (not that clear but good illustration) shows how the seal deforms under application, then retracts piston when fluid pressure subsides to give running clearance. If piston is binding then seal can't exert enough pull to get it back down bore.You needed to be absolutely scrupulous in cleaning that seal groove very carefully to make it work as originally.
Doesn't seem like you've missed anything in the hydraulic operation of it, assuming that the pattern design follows faithfully the original in regard to the seal and groove.Another more fundamental hang up could be the moving pad being painted round it's perimeter, in effect snagging on the outer caliper bore. You may have to dissemble it to verify it's not causing you an unintentional problem. Some of the rear disc mastercylinder hang up like this from the return hole into the reservoir being impeded. Application goes OK, but seals don't haven't enough grunt to clear the fluid back up the line to give clearance at the pad..They are only simple systems, it's usually one on these that leaves it hanging.As regards dragging, you can usually just hear them as you spin the wheel when lifted, but not feel any drag at all if all is working OK.
